Harare- Zimbabwe’s gold export earnings have inexplicably plunged for three consecutive months slipping from a record high of US$361.1 million in November 2024 to US$291.8 million in December, US$291.4 million in January 2025, and a sharp drop to US$216.8 million in February 2025 despite global gold prices breaking the historic US$3,000 per ounce mark on the London Bullion Market Association (LBMA) spot prices in 2025.

This downward trajectory is particularly perplexing given the soaring international prices, which should theoretically bolster earnings even with reduced production.

Zimbabwe, however, does not sell directly to the LBMA and exports its gold primarily in unwrought, semi-manufactured, or powder form through agents, notably South Africa.

This structural setup, combined with pervasive smuggling and policy missteps, appears to be undermining the country’s ability to capitalise on the gold price surge. This analysis interrogates the policies driving this decline, explores the role of illicit trade and intermediary costs, and proposes actionable reforms, drawing lessons from case studies in Botswana, South Africa, and Ghana.

Gold prices escalated from US$2,800 per ounce in January 2025 to nearly US$3,000 per ounce by February, peaking in March. Yet, Zimbabwe’s export earnings have not mirrored this upward trend.

Production data reveals a decline from 4.2 tonnes in November 2024 to 3.8 tonnes in December, 3.1 tonnes in January 2025, and 2.6 tonnes in February. While this reduction partially explains the earnings drop, the high prices should have acted as a hedge, offsetting the output decline.

Zimbabwe’s declining gold production should, in theory, be offset by soaring global prices, yet the numbers tell a baffling story of lost opportunity. In October 2024, the country produced 4.2 tonnes of gold, but by November, output dipped to 3.8 tonnes a 200kg deficit. Despite this drop, November saw Zimbabwe’s highest export earnings ever at US$361.1 million, capitalising on rising gold prices that weren’t present in September, when 4.2 tonnes yielded less despite higher volume.

The price surge more than compensated for the shortfall. Fast forward to December, and the plot thickens: production held steady at 3.8 tonnes, matching November, but earnings crashed to US$291.8 million a US$69.3 million plunge despite prices climbing higher than in November.

This pattern persists into 2025. January’s output fell to 3.1 tonnes and February’s to 2.6 tonnes, with a 700kg deficit from January hitting February’s earnings, dragging them down to US$216.8 million.

Yet, with prices peaking near US$3,000 per ounce by March, these declines should have been cushioned. They weren’t. The consistent downward spiral since December, even when production stabilised, points to more than just output woes. Three culprits stand out: illicit trade siphoning off profits, steep intermediary costs bleeding value, and the export of semi-manufactured gold fetching pitiful rates despite a global price boom. Rising prices are Zimbabwe’s lifeline, but something or someone is cutting it short.

Zimbabwe’s gold sector is governed by a monopoly where the Reserve Bank of Zimbabwe (RBZ), through its subsidiary Fidelity Printers and Refiners (FPR), is the sole legal buyer. This centralisation, intended to streamline revenue collection, has instead fostered market distortions. FPR’s suppressed prices typically 3-5% below global spot rates create an arbitrage opportunity, incentivising miners, particularly artisanal ones, to sell to informal buyers offering immediate cash at higher rates.