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Reserve Bank of Malawi cagy on gold market

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Grain Malunga

Reserve Bank of Malawi (RBM) is cautious on joining the global market in trading gold it is buying from Artisanal and Small-scale Miners (ASMs) in the country.

Presenting the 2021/22 National Budget, Minister of Finance Felix Mlusu indicated that gold worth K60 million had been purchased by the bank.

However, RBM Spokesperson Onelie Nkuna said there was a long way to go in harmonising the local industry before the country could trade gold on the international market.

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“The market has just been established and is still in its nascent stage. There are a number of structural bottlenecks that need to be eased for the market to fully mature and become stable, among which is organising the ASMs into productive groups such as cooperatives,” Nkuna said.

Mining expert Grain Malunga said the market could benefit both the ASMs and the government.

“We had the challenge of the gold being produced by an informal sector, meaning the government was not benefitting from the revenue. This establishment will help in profiting the ASMs and the government as well in collecting tax,” Malunga said.

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The World Bank recently indicated that the price of gold may decrease to $1,740 per ounce in 2021 from an average of $1,775 per ounce in 2020.

The Bretton Woods institution cites an economic slowdown due to the Covid pandemic.

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