Mutambara says gold coin is “a self-enrichment scheme for the elites”
Former deputy prime minister Professor Arthur Mutambara has said the newly introduced gold coin is “a self-enrichment scheme for the elites” and will create an arbitrage opportunity
The Government of Zimbabwe introduced gold coins in the market this week as a measure to curb the skyrocketing inflation and ease citizens’ demands for foreign currency.
The Reserve Bank of Zimbabwe (RBZ) governor John Mangudya and Finance Minister Mthuli Ncube said the coin would also act as a store of value for those with large amounts.
He further urged Zimbabweans to opt for the gold coins, which cost about US$1,800 each.
Mutambara noted that one would exchange their US$ on the parallel market for ZWL950, buy gold coins in ZWL at a rate of 441 and pocket 100% profit.
“That is the gold coin arbitrage opportunity,” he said.
“Is this not common sense? It gets worse. For the elites who are connected and have access, you don’t have to involve your hard earned US$ in the first part of the transaction…
“…You take your ZW$ to the RBZ and buy the US$ at the auction rate. You take these ill-gotten US$ to the parallel market and buy ZWL at 950
That’s a huge profit. Then you go and buy your gold coins at 100% profit as explained before. No production. It is shameful.”
Addressing journalists on Monday, Mangudya said the gold coin was a store of value and a sign of respect for Zimbabweans.
“We are now providing that store of value to ensure that people do not run to the parallel market in search of foreign currency to store value,” he said.
“And there is no other better product that can be used to store value other than gold. We know what you have been going through in terms of the fear factor of losing value and therefore we are providing this gold coin.”