Transparency boost: ZiG gold reserves confirmed by independent audit

Michael Tome

Business Reporter

IN a bid to bolster public trust in the Zimbabwe Gold (ZiG) currency, the Reserve Bank of Zimbabwe (RBZ) has released findings of an independent audit confirming its gold reserves.

An audit by local independent auditors BDO Zimbabwe confirmed the volume of reserved bullion the central bank holds, which translates to 85 843.38 ounces.

Upon the launch of ZiG, the central bank pledged to ensure independent external auditors conduct an annual audit of the precious minerals and foreign currency reserves that back the local unit once a year.

This is part of the measures the authorities have put in place to rebuild confidence in the local currency.

The central bank said this in response to concerns that the authorities might print more money than is backed by the country’s reserves, or potentially fail to maintain the promised resource levels, thereby undermine the stability of ZiG.

ZiG is backed by a basket of minerals, mainly gold, and foreign exchange reserves.

Cumulatively, total holdings of gold and foreign currency reserves recorded a 90 percent increase to approximately US$550 million (ZiG14,3 billion) at the end of January 2025, from US$285 million in April 2024, when the currency was launched.

RBZ Governor Dr John Mushayavanhu revealed this while presenting the 2025 Monetary Policy Statement on Thursday.

According to the central bank, these reserves are able to support ZiG and fully cover external obligations by the Government and companies at the same time.

As such, the central bank allayed fears by the general public and economic players who doubted ZiG’s capability as a medium of exchange and store of value.

In the independent auditor’s report, addressed to the Minister of Finance, Economic Development and Investment Promotion, BDO confirmed the amount of gold held by the central bank.

“We have audited the gold balance of the Reserve Bank of Zimbabwe as at December 31, 2024.

“As at that date, the Bank held 85 843.38 ounces (2,67 tonnes) of gold valued at US$223 784 913.34 (ZWG5 773 315 086.82) at international market prices.

“In our opinion, the gold balance is fairly stated, in all material respects, in accordance with the Reserve Bank of Zimbabwe Act (Chapter 22:15) and its accounting policies which use IFRS (International Financial Reporting Standards) as a guide,” said BDO in its report.

In a bid to promote the use and stability of the domestic currency in the economy, Governor Mushayavanhu also reduced the exporters’ foreign currency retention threshold from 75 percent to 70 percent.

According to the apex bank, the measure aligns with the drive that aims to increase the use of ZiG in the economy while also building critical forex reserves to anchor the currency.

“People were saying it is not true that there are 2,6 tonnes of gold in the vault but again we commissioned an audit, you do not trust us, so sometimes we have to go an extra mile to endorse what is there factually.

“. . . of the reserves that I talked about earlier on, we have US$186 million as deposits in our accounts and then we have 2,6 tonnes of gold in the vault worth about US$241 million and other precious minerals worth about US$122 million,” said Governor Mushayavanhu.

This substantial growth of gold and foreign currency reserves by the central bank provides more than three times the cover for reserve money, which stands at ZiG3,5 billion.

According to the central bank chief, the RBZ has been building internal capacities and implementing a reserves accumulation strategy since the introduction of ZiG in April 2024.

Dr Mushayavanhu also indicated that the central bank is leveraging the anticipated increase in the production of the yellow metal to support the sustainable accumulation of gold and foreign currency reserves.

He noted that the RBZ’s monetary policy objectives prioritise currency and exchange rate stability, and commitment to continued reserve accumulation.

Zimbabwe’s move to back the local currency with gold and foreign currency reserves ensures that ZiG is fully backed at all times, thus maintaining currency and exchange rate stability.

Dr Mushayavanhu highlighted that the Reserve Bank of Zimbabwe will this year refine and take significant steps to enhance its reserves accumulation strategy.

The central bank aims to bolster economic stability, improve confidence among investors and safeguard against external shocks.

This proactive measure reflects a commitment to creating a resilient financial framework that supports long-term growth and mitigates potential vulnerabilities in the economy.

This enhanced reserve base will ensure adequate coverage for the gold-backed ZiG and meet regional benchmarks for import cover, measured in months.

“The reserves accumulation strategy of the Reserve Bank in 2025 will, therefore, shift focus towards building up a buffer of usable official reserves to adequately cover ZiG and to meet regional benchmarks of months of import cover,” said Dr Mushayavanhu.

By implementing this multi-faceted approach, the RBZ aims to guarantee value preservation and sustainable growth in foreign currency reserves, ultimately supporting Zimbabwe’s economic stability and growth.