Zimbabwe Loses $1.5 Billion Annually To Gold Smuggling

report published Tuesday by the International Crisis Group calculates that cash-strapped Zimbabwe is losing at least $1.5 billion a year through the smuggling of gold, mainly to traders in Dubai. The figure is higher than the government's own estimates of $1.2 billion a year lost through the illicit gold trade, according to Bloomberg.

"Estimates suggest that more than $1.5 billion worth of gold leaves Zimbabwe illegally each year, often ending up in Dubai," said the report by the International Crisis Group. Incidentally, the role of Dubai and the UAE in Zimbabwe's gold smuggling operation has grown explosively in the past two years, with the reported difference between Zimbabwe gold exports and UAE gold imports soaring between 2016 and 2018.

Zimbabwe's illicit gold trade is so extensive, the report stated that "some dealers estimate that illegal exports top official deliveries," to the country's formal refinery.

The landlocked southern African country with chronic financial turmoil and endogenous corruption boasts vast gold reserves, with the sector accounting for 60% of Zimbabwean exports. The gold sector provides jobs to nearly 10% of the country's population, according to the report.

Alas, most of the output ends up in the black market, and just last month the head of Zimbabwe's artisanal and small scale mining federation was arrested with six kilos (13 pounds) of gold worth over $360,000 (305,000 euros) in her hand luggage just before boarding a flight to Dubai.

"Amid the collapsing economy, an estimated 1.5 million people have turned to artisanal mining as a safety net," said the report, adding poverty and the fallout from the Covid-19 pandemic will likely drive more people towards the sector.

According to official figures, gold production in the first eight months of 2020 rose 10%, driven especially by output from small-scale miners.

It isn't clear how much of that gold ended up in official trade channels and how much was smuggled out of the country illegally. The reason: local miners are unhappy with a payment system which requires them to sell their gold to the state-owned buyer, Fidelity Printers and Refiners.

1 2 3
View single page >> |

Disclaimer: Copyright ©2009-2020 ZeroHedge.com/ABC Media, LTD; All Rights Reserved. Zero Hedge is intended for Mature Audiences. Familiarize yourself with our legal and use policies every time ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.