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Zvamaida Murwira in Kariba

Gold coins are more likely to be stable as a store of value than foreign currency as they can withstand volatility from geo-political factors better, legislators have heard.

Reserve Bank of Zimbabwe director for financial markets Mr Azvinandaa Saburi told legislators in Kariba yesterday during a workshop on gold production value chains, said while the price of gold is affected by geo political volatilities globally, research has shown that the effects are less than what happens on currencies.

During a plenary session, legislators asked Mr Saburi if those holding gold coins were not vulnerable to the shocks of global political and economic developments that might have an effect on the value of gold.

Legislators wanted to know if those buying the new Mosi-oa-Tunya gold coins not be left to count their losses if international events pushed down the price of gold.

In response, Mr Saburi, who was standing in for RBZ Governor Dr John Mangudya, said while global political developments had a bearing on gold price, those holding gold were better off than those holding United States dollars or South African rands, for example.

He said the price of gold coins was determined by the international price of gold as well as the exchange rate.

“Gold coins are meant to be a store of value. Volatility in gold price is lower compared to other commodities. When there is political volatility in the world, the only safe haven is gold. Research has shown that people move to gold, they are not comfortable in holding currency,” said Mr Saburi.

“A lot of people are not comfortable to hold currencies when there are challenges because gold is affected less than currency. It has more stability than a currency. A currency is affected by the politics of that country. So gold coins are still relevant even in our multi-currency system.”

Economist, Mr Francis Mhere echoed the same sentiments adding that gold coins were effective methods to hedge against value. He said it was critical also to note that while gold coins were not a panacea to inflation and price volatility, a bearer of gold coins would have been cushioned from erosion of value.

“Gold is universally acceptance. What we are doing with gold coins is to cushion investors, or those that hold gold coins. Policy makers must still come up with policies that deal with inflation and price volatility,” said Mr Mhere.

Zimbabwe Anti Corruption Commission Commissioner John Makamure said crime prevention was one of the of the objective of the antigraft body besides investigating, arresting offenders and asset recovery. This worked on the basis that if people were deterred from crime then there was no crime.

“There is the crime prevention side which is usually underplayed. People want to see who has been arrested and that they.must go to Chikurubi. That is their expectation. In the area of gold leakages, prevention is the most important thing. We must look at systems and procedures,” said Comm Makamure.

He said ZACC has been facing resistance whenever it visited institutions seeking to find out if their systems are strong enough to detect and prevent corruption or illicit activities.

Comm Makamure said another challenge faced by ZACC was victimization of witnesses or whistle-blowers because there was no law that protects them.