HARARE – Mining royalties – one of Zimbabwe Revenue Authority (Zimra)’s key revenue heads – took a knock in the six months to June due to diminishing global mineral prices, dipping 25 percent to $81,1 million against a target of $107,8 million.
“The revenue head failed to meet set targets but still grew by 25 percent from $64,8 million that was collected in the first half of 2012. The depressed performance of the revenue head was mainly due to the softening of international mineral prices, especially gold and diamonds,” said Sternford Moyo, Zimra’s chairperson.
Economic analysts say the decline in the prices of precious metals could be attributed to the unanticipated slowdown in the Chinese economy in the first quarter of 2013 which signalled a setback in the global economy and hence a lower demand for precious metals.
The depreciation of other currencies including the Australian dollar and Japanese yen also contributed to the decline. For instance, global price of gold in the month of April declined from $1 560 per ounce on April 5 to $1 410 per ounce on April 19.
The prices, however, firmed to $1 467 in the last week of the month due to the increased physical demand from Asia. Last week gold plummeted to a near three-year low of $1 180,71 an ounce although it pared back some of the losses to $1 202,56 an ounce and is currently trading on an average price of $1 281,70.
This development comes as the revenue collector missed its revenue collection target for the second quarter of this year by six percent after its net collection amounted to $836,9 million against a target of $886,2 million.
Moyo said their failure to meet targets was due to economic setbacks that led to shrinkage of the revenue base.
“The first half of 2013 has seen the Zimbabwean economy being characterised by liquidity constraints, power shortages, retrenchments, scaling down of operations and company closures, among other challenges,” said Moyo.
“The revenue authority’s failure to meet the target resulted in missing its target for the first-half of the year by a marginal one percent.”
Zimra’s gross collection for the quarter was $873,6 million while net collections for the first half were $1,6 billion against a target of $1,67 billion, resulting in the marginal negative variance of the one percent.