An Economist has backed the Ministry of Mines and Minerals Development’s move to make the Central Bank the first buyer of gold produced in Zambia.
Recently, Ministry of Mines announced plans to tighten regulation of gold trading and processing to curb leakages in the sector.
According to Permanent Secretary Dr. Hapenga Kabeta, all companies involved in downstream gold activities will be required to obtain separate licences under a new regulatory framework which is expected to be implemented once the necessary legislation is passed.
He noted that currently, only the Bank of Zambia remains the country’s sole authorized buyer of gold, with gold-processing and purchasing arrangements expected to be channeled through the Central Bank.
Speaking in an interview with Money News, Kampamba Shula, described the initiative as a sovereign step that could strengthen the country’s asset base.
Mr. Shula said economists have advocated for the measure for several years, arguing that holding gold through the central bank would help Zambia build strategic reserves.
“Making the Central Bank the first buyer of gold is something that economists like myself and others have been pushing for. This is a very much welcome move,” he said.
He also urged the Ministry of Mines to engage stakeholders as it takes the proposed legislation to Parliament.
Mr. Shula stated that broader consultations could help address concerns before the law is enacted.
He said the proposed gold initiative is consistent with earlier efforts to establish a sovereign wealth fund, noting that a similar proposal was presented to Parliament in 2018.
Mr. Shula added that Zambia should therefore view the gold initiative as the beginning of a broader strategy to strengthen the country’s sovereign asset holdings.
He further proposed that Zambia should, in the long term, consider incorporating copper into the Bank of Zambia’s asset base through copper derivatives.
“Copper must be included but that would take maybe five or six years, but this is the right direction,” Mr. Shula stated.
