MASVINGO – AFC Commercial Bank head of Strategy, Joseph Mverecha has told Government to stop selling and instead accumulate gold reserves particularly in the uncertain geopolitical environment caused by the Russia-Ukraine War.
“You don’t sell gold reserves in this environment, accumulate it, build foreign currency in gold and US$ reserves,” he said.
Mverecha was a keynote speaker at a Great Zimbabwe University (GZU) Economic and Business Sciences International Conference organised by Munhumutapa School of Commerce held over two days.
He emphasised the importance of currency stability in the growth of any economy and said US$ foreign currency and gold reserves are important for that stability.
However, added Mverecha, gold reserves provides much more stability to a currency than the US$. He therefore decried the Zimbabwe Government’s decision to sell its gold reserves at a time Central Banks all over the World are buying and accumulating gold.
He said in 2022 alone, Central Banks bought 1136 tonnes of gold, the highest since 1950 with a value of US$70 billion because of the uncertainty caused by the Ukraine war.
“We know that the US$ is not going to collapse anytime soon but we want to have alternative forms of reserves in our country. Gold is the thing we must have in addition to foreign currency reserves. We are not saying lets close the doors to US$, let’s build forex in US$ but let’s build our gold reserves,” said Mverecha.
The conference which started on Thursday and ended on Friday was held under the theme “Strengthening Sustainable Economic Development through Entrepreneurship, Science and Innovation”.
“Accumulation of gold is necessary as a long term plan for currency stability. In the current scenario, central banks are buying gold when we are busy selling our gold.The reason why it is a necessity is that we are entering an uncertain geo-political environment and we don’t know how the Russia-Ukrain war is going to end and what are spill over effects internationally,” he said.
The conference was an organised interaction of academics with industry and commerce and the cross pollination of ideas into the University’s curricular. – Masvingo Mirror