ZIMBABWE stands to reap significant economic gains from the current surge in global gold prices, with increased export earnings expected to offset losses from weakening base metal prices, an economist has said.
Executive Director of Africa Economic Development Strategies (AEDS), Professor Gift Mugano, said the rally in bullion prices comes at a critical time for the country’s mining sector, which remains the backbone of foreign currency generation.
“In view of the fact that gold traditionally constitutes 53 percent of mineral exports and 48 percent of total exports, the surge in gold prices has immense benefits for Zimbabwe in terms of an increase in export revenue, which will dilute potential loss of export revenue arising from declining prices of base metals, that is, platinum, rhodium, chrome and nickel.
Minister Mthuli Ncube
“Noticeable recovery in platinum, nickel and lithium prices will increase export receipts, tax revenues, and jobs in the mining sector and when combined with the current retention policy, they may further strengthen profitability and support the long-term viability of the platinum industry,” said Prof Mugano.
Amid rising geopolitical tensions, investors are piling into the safe-haven of gold, with the bullion surging past US$5 500 an ounce, extending an extraordinary rally that has seen the precious metal gain more than 20 percent in value since the start of the year.
The milestone marked the latest achievement in an extraordinary run for gold, with its price surging nearly 90 percent since United States President Donald Trump’s inauguration in January last year.
The record-high gold prices are serving as powerful economic drivers for commodity-dependent developing nations like Zimbabwe.
In Zimbabwe, gold is the leading export, and mining contributes over 60 percent of the country’s foreign currency earnings, underlining the strategic importance of the sector to macro-economic stability.
Donald Trump
As gold prices soar, this presents a promising opportunity for the Government to increase revenue through a newly revised royalty structure.
Initially, there was industry pushback against a proposed royalty hike to 10 percent for gold priced over US$2 500 per ounce.
In response, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube introduced a tiered system in the 2026 National Budget.
“The tiered royalty structure outlines three percent for gold sold under US$1 200, five percent for prices between US$1 201 and US$5 000, and 10 percent for prices over US$5 000,” Minister Ncube said.
As gold prices are now consistently above these thresholds, the Government is poised to earn more from large-scale miners, while artisanal and small-scale miners continue to pay a lower rate of two percent.
Economists say the enhanced royalty inflows, coupled with stronger export receipts, will help ease pressure on the country’s balance of payments and support fiscal consolidation efforts. The additional revenue also creates room for increased public investment in infrastructure, social services and economic transformation programmes.
With projections suggesting that gold prices may reach or exceed US$6 000 this year, the country’s royalty revenues could increase by hundreds of millions of dollars.
The development dovetails with Zimbabwe’s broader economic ambitions, as the country seeks to leverage its mineral wealth to drive industrialisation and value addition.
Increased mining earnings are expected to support the national vision of attaining upper-middle-income status by 2030.-herald
