• Harare has scrapped a planned royalty hike, keeping the rate at 5% for gold prices under $5,000/oz to ensure operational viability.

• Official data shows gold deliveries surged 37% to nearly 33 tonnes in the first nine months of 2025, a boom the state aims to protect.

• This move contrasts sharply with West Africa’s more powerful mining codes, positioning Zimbabwe as a stable alternative for global capital.

The Zimbabwean government has abandoned its proposal to double gold royalties in the 2026 National Budget. Confirmed by Finance Minister Mthuli Ncube during the conclusion of the parliamentary budget debate on Thursday, this reversal is widely interpreted by analysts as a strategic play to position Zimbabwe as a capital-friendly jurisdiction, precisely at a moment when West African producers are tightening their grip on the sector.

The initial budget proposal had spooked the market with a plan to trigger a 10% windfall tax at relatively low price thresholds. However, following "intense representations from the platinum and gold associations," as acknowledged by Minister Ncube in his address broadcast by the national broadcaster ZBC, the Treasury has recalibrated. The new framework retains the standard 5% royalty rate for all gold prices up to $5,000 per ounce—a ceiling significantly higher than the current trading price of ~$4,300. "We have adjusted the triggers to ensure we do not kill the goose that lays the golden egg," Ncube stated, signaling a clear preference for production volume over immediate tax yield.

A Geopolitical Contrast: Zimbabwe vs. The Sahel

This policy pivot is particularly significant when viewed through a continental lens. While Harare is lowering the barrier to entry, its competitors in the Sahel are erecting new ones. Over the last 24 months, military-led governments in Mali and Burkina Faso have overhauled their mining codes to assert "resource sovereignty." Mali’s 2023 code, for instance, allows the state and local investors to acquire up to a 35% stake in mining projects, while Burkina Faso has similarly revised its fiscal terms to capture a larger share of rent.

By effectively capping royalties at 5% for the foreseeable future, Zimbabwe is differentiating itself. "In a region characterized by a wave of resource nationalism, Harare’s message to foreign direct investors (FDI) is one of predictability," notes a briefing note from a Harare-based brokerage. For global mining majors like Caledonia Mining Corporation or impulsive capital looking for exposure to African gold without the regulatory volatility of the Sahel, Zimbabwe is emerging as a pragmatic alternative.

Protecting the Production Boom

The decision is also rooted in hard data. The Ministry of Finance is keen to sustain the exceptional growth recorded this year. According to figures from Fidelity Gold Refinery (FGR), gold deliveries jumped by 37.5% in the first nine months of 2025, reaching approximately 33 tonnes, compared to 24 tonnes in the same period in 2024.

This surge is largely driven by small-scale miners, who are highly sensitive to price and tax shifts. As highlighted in recent parliamentary proceedings, a higher royalty rate risked pushing this output back into the black market—a disaster scenario for the government which relies on physical gold to back its new currency, the Zimbabwe Gold (ZiG). By retreating on taxes, the government is effectively paying a premium to keep the gold supply chain formal, stable, and transparent.

Idriss Linge