Mining sector in Zimbabwe will contract 4.1 percent this year, Finance Minister Mthuli Ncube said on Thursday, reflecting the impact of Covid-19 and other challenges evolving around foreign currency retentions.
Currently, the mining sector contributes about 8 percent of total GDP and has set an ambitious target of generating US$12 billion revenues by 2023 from as little as US$2.7 billion in 2017.
“Priority policy areas to attain this target and other TSP benchmarks include reviewing and updating mining legislation, enhancing exploration and investment in mining, modernization and computerisation of the mining title administration system (mining cadastre), improving transparency in the mining sector and establishing a viable fiscal regime,” said Ncube while presenting midterm 2020 budget and economic review in Parliament.
The mining sector, being the largest foreign currency earner (60 percent of total foreign currency) is poised to surpass agriculture which currently contributes between 9-10 percent to GDP. “Furthermore, benefaction and value addition of minerals to create more jobs and earn more foreign currency are priorities for the sector.”
In the first quarter of 2020, PGMs and diamond registered strong performance compared to same period in 2019, while gold, chrome and nickel fell short of targets. “Therefore, growth for mining sector is now projected to slow-down to -4.1 percent in 2020, reflecting the impact of COVID-19 and other challenges including perceptions around retentions, erratic power supply and loss of skills in the mining sector,” Ncube said.
He said the government remains seized with dealing with mineral leakages which continue to deprive the country of substantial foreign currency inflows. “Therefore, during the half of the year and going forward, the Budget will expend more resources on capacitating security institutions engaged in monitoring and curbing mineral leakages,” he said, adding that, this will also prioritise the Minerals and Border Control Unit.
Reforms in the mining sector, he said, are ongoing and on course to attaining the US$12 billion target