MINING is one of Zimbabwe's pivotal sectors, contributing approximately 12% to the country's gross domestic product and accounting for 80% of its annual exports. As a major employer, the sector supports over 30 000 formal and 500 000 informal jobs, according to official figures.
Therefore, it is crucial for the government to heed the sector's concerns. According to the Chamber of Mines of Zimbabwe's latest report, the mining sector faces numerous challenges, including persistent power outages, excessive taxes, capital constraints, and high energy tariffs. If left unaddressed, these issues may curtail production and stifle growth, which are all ingredients for a difficult future for Zimbabweans.
To mitigate this, the government, mining sector players, and stakeholders must collaborate to find solutions to the issues that affect the economy and business, specifically mines. The discussions should focus on creating a conducive business environment, promoting investment, and ensuring the sector's sustainability.
Any discussions should be characterised by sobriety, sound reasoning, and honesty. A balanced approach is essential. If we fail to achieve this balance, the consequences will be severe. However, we remain confident that these challenges can be overcome. The report proposes several recommendations. That should be a starting point for any search for solutions. For instance, it proposed reducing mining fees and charges to align with regional averages and standardising Rural District Council levies across mineral subsectors and districts.
Additionally, miners recommended revising the Environmental Impact Assessment Levy framework and the 2% environmental rehabilitation levy to make them more competitive. Mining executives also expressed concerns about the 25% export proceeds surrendered to the government, citing exchange rate disparities that result in a 50% loss of value. This equates to a 12% tax on exporters' gross proceeds, impacting project viability, according to the mining sector.
The report highlights the need for fair compensation through increased use of Zimbabwe Gold (ZiG) balances for taxes and statutory obligations. Furthermore, it noted the fiscal framework's suboptimality due to multiple taxes, high royalties, and levies. Some potential solutions include implementing a stable and competitive fiscal regime, enhancing transparency and accountability in the mining sector, and investing in infrastructure development, particularly energy and transportation.
The solutions also include promoting value addition and beneficiation, and supporting small-scale and artisanal miners. Electricity shortages and high energy tariffs should be addressed as a matter of urgency. But former Zesa Holdings chief executive officer, Josh Chifamba, said what is needed is safe, adequate, reliable power at least cost, not cheap power. By addressing the sector's concerns and implementing these solutions, Zimbabwe can unlock the mining sector's full potential, drive economic growth, and improve the livelihoods of its citizens. In the long term, a thriving mining sector can also contribute to the country’s economic diversification, reduce dependence on a single sector, and attract foreign investment. The government should prioritise policy consistency, regulatory clarity, and investor-friendly initiatives.
The mining sector's growth potential can also have positive spill over effects on other industries, such as manufacturing and construction.
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