LOCAL financial services firm, IH Securities expects the government to cash in on its newly introduced gold royalty regime of 10% as the price for the white metal hit a new record high of US$5 514,98 per ounce this past week.
Gold is enjoying an unprecedented global rally as central banks across the globe increase their reserves of the mineral and investors seek a stable hedge against increased geopolitical tensions around trade and investments.
Last Tuesday, the gold price per ounce hit an all-time high of US$5 514,98 but fell to US$5 009,12 as of Friday.
The gold price surged by 70,1% last year, leading to increased deliveries of the mineral from mostly small-scale miners to a reported 46,7 tonnes exceeding the initial target of 40tonnes as miners sought to cash in.
Zimbabwe implemented a new gold royalty of 3% when the price is below US$1 200 per ounce, 5% between US$1 200 and US$5 000, and 10% when prices exceed US$5 000.
The government is expected to earn even more money from gold as the price is expected beyond US$5 000 per ounce and could even breach US$6 000, leading to increased deliveries.
“The gold rally is expected to continue in 2026. UBS set a mid-year 2026 target of US$4 500/oz, while J.P. Morgan and Deutsche Bank anticipate prices to reach US$5 000/oz by end-2026. The World Bank is more cautious, projecting overall commodity prices to ease in 2026,” IH Securities said in its latest outlook.
“For Zimbabwe, sustained high gold prices would support foreign currency inflows, and export receipts, given gold’s significant role in export earnings.
“However, if prices exceed US$5,000/oz, per the 2026 gold royalty policy 10% would apply, increasing the revenue per ounce for government, but it could dampen miners’ realised earnings and reinvestment capacity to sustain output growth.”
Gold deliveries to Fidelity Gold Refinery for the year are now expected to be over 50 tonnes.
“As per the Ministry of Finance, Economic Development, and Investment Promotion, the effective tax rate for mining entities averaged 14% between 2023 and 2024, underscoring the relatively modest fiscal contribution of the sector despite its outsized role in exports,” IH Securities said.
“In this regard, government has identified scope to strengthen mining-related fiscal revenues, with the 2026 budget introducing measures primarily aimed at improving revenue capture and transparency.
“A key intervention is the adjustment of gold royalties, with the marginal rate increased to 10% for gold prices above US$5 000 per ounce, enhancing fiscal responsiveness during periods of elevated commodity prices.”
For the current fiscal year, the government is targeting to collect revenues amounting to ZiG288 billion (US$9,4 billion) as it has planned expenditures of ZiG290,9 billion (US$9,5 billion).
With the government earning most of its revenue from the economy’s two main economic drivers, mining and agriculture, a surge in gold prices could lead to the Treasury recording a budget surplus.
“Gold output rebounded significantly, with its production index rising to 179,5 in 2Q25 (2025 second quarter) from 128,9 in 1Q25 (2025 first quarter), supported by improved deliveries from both large-scale and small-scale producers and stable operating conditions,” IH Securities said.
“Gold prices rose by 70,1% in 2025, materially boosting sector revenues and strengthening incentives for formal deliveries. Beyond price developments, government initiatives to improve operational efficiency and formalise artisanal and small-scale mining were critical, given that artisanal miners accounted for 34,9t, or 74,7%, of the 46,7t of gold delivered to Fidelity Gold Refinery in 2025.”
IH Securities said the scale of artisanal miners’ participation highlighted both the sector’s production resilience and the importance of reducing leakages.
According to the financial services firm, the International Crisis Group estimates Zimbabwe previously lost around 22,4t of gold annually to smuggling, equivalent to approximately US$1,5 billion in foregone export revenues.
IH Securities said this underscored the significant fiscal and foreign-currency gains from improved traceability, formalisation, and enforcement across the gold value chain.