MINING GOLD THE ZAMBIAN WAY
…Empowering Citizens and Building National Wealth through a Strategic Offtake Model

MINING GOLD THE ZAMBIAN WAY
…Empowering Citizens and Building National Wealth through a Strategic Offtake Model

By Dr. Lubinda Haabazoka, Economist

In 2018, I submitted an advisory note to the Presidency proposing a citizen-driven, state-facilitated approach to harnessing Zambia’s gold potential. At the heart of the proposal was a bold, yet practical idea: let Zambians mine gold legally and securely, while the Zambia Gold Company acts as a central offtaker, purchasing the gold and delivering it to the Bank of Zambia to bolster national reserves.

Six years later, with ongoing debates around resource nationalism, youth unemployment, illicit financial flows, and monetary stability, this proposal deserves urgent attention. If properly implemented, it can revolutionize Zambia’s approach to gold mining, empower communities, curb smuggling, and strengthen our macroeconomic foundations.

1. Background: The Problem with Gold Mining in Zambia Today

Despite being endowed with considerable gold deposits across provinces such as Eastern, Central, Northwestern, and Southern Zambia, the country has not reaped the full benefits of this strategic resource. Currently, the sector is characterized by:

Artisanal and small-scale miners (ASMs) operating informally without licenses, training, or access to markets.
Rampant smuggling of gold into neighboring countries and overseas markets, often unrecorded and untaxed.
Revenue leakage due to unregulated transactions and middlemen who buy at below-market prices.

Lack of transparency and weak monitoring mechanisms, leading to untracked production volumes.
Exclusion of locals from long-term value chains, with foreign interests dominating much of the formal sector.

This fragmented and informal landscape undermines national goals of inclusive growth, economic diversification, and sovereign wealth accumulation. Without systemic intervention, Zambia risks continuing a cycle where its people remain poor while its minerals enrich others.

In 2022, Zambia produced approximately 3,409 kilograms of gold, a slight decrease from 3,987 kilograms recorded in 2021. Since 1990, average annual production has hovered around 1,930 kilograms. The country’s gold production peaked in 2013 at 5,210 kilograms, while the lowest level was observed in 1995 at just 91 kilograms. In 2024, over 680 artisanal and small-scale mining

(ASM) licences were issued across the country, with 519 of them specifically dedicated to gold extraction. This reflects a growing effort to formalize and empower local participation in the gold mining sector.

As of July 2025, the Bank of Zambia holds gold reserves valued at approximately US$233.6 million, equivalent to about 2,163 kilograms. The central bank began its gold reserve accumulation around 2021, initially recording reserves worth around US$43 million. This value grew to approximately US$83 million in 2022 and further increased to about US$190 million by mid-2024. In a single fiscal year around 2020/2021, the Bank of Zambia purchased 282.8 kilograms (approximately 9,080 ounces) of locally sourced gold through annual offtake agreements, including about 25,200 ounces from Kansanshi and 21,000 ounces from the Zambia Gold Company. From February 2021, the bank averaged monthly gold purchases of around 2,100 ounces, accumulating up to 8,400 ounces (roughly 0.26 tonnes) by May 2021.

2. The 2018 Proposal: A Citizen-Centric Gold Mining Model

The advisory I submitted to the Presidency in 2018 laid out a three-tiered model aimed at empowering Zambians, securing national gold resources, and transforming a vulnerable sector into a pillar of economic stability.

Tier 1: Zambians as Authorized Miners

Target Group: Youths, cooperatives, women’s groups, and traditional small-scale miners.
Licensing: Government to decentralize and simplify mining license acquisition through the Ministry of Mines and local councils.
Support Systems: Provision of training, equipment, safety gear, and environmental guidance through public-private partnerships.
Formalization: ASMs to be registered, tracked, and linked to legal mining sites with geodata provided.
Tier 2: Zambia Gold Company as the National Offtaker

Central Role: ZGC purchases all gold mined by local Zambians at near-London Bullion Market Association (LBMA) spot prices.
Price Fairness: Eliminate exploitation by illegal buyers or informal agents.
Infrastructure: ZGC establishes regional gold-buying hubs with digital scales, purity testing labs, and transparent price boards.
Capacity Development: ZGC trains local staff and cooperatives in mineral grading, storage, and logistics.

Tier 3: Bank of Zambia as the Strategic Gold Reserve Holder

Gold Reserves: BoZ uses its monetary instruments to purchase gold from ZGC using chat, enhancing local liquidity and reducing dollar dependency.
Reserve Diversification: Gold becomes part of Zambia’s foreign reserves portfolio, insulating the economy from external shocks.
Fiscal Confidence: The increase in reserve holdings strengthens BoZ’s ability to defend the kwacha, reduce inflation volatility, and attract investor confidence.

3. Benefits of the Model: Inclusive, Strategic, and Nationalistic

This framework offers Zambia an opportunity to achieve simultaneous economic, monetary, and social development objectives:

 Citizen Economic Empowerment

Thousands of Zambians gain dignified employment and entrepreneurship opportunities in gold mining.
Youth cooperatives transition from street vending and informal jobs to owning viable micro-mining enterprises.
Rural communities participate directly in Zambia’s mineral wealth.
 Foreign Exchange Stabilization and Reserve Expansion

BoZ increases gold holdings, reducing reliance on external reserves like USD or EUR.
A diversified reserve base cushions the economy during currency volatility, external debt negotiations, or global shocks.
 Curbing Smuggling and Illicit Financial Flows

Centralized offtake and traceability mechanisms discourage black market trading.
Gold smuggling, which deprives Zambia of millions of dollars annually, is significantly curtailed.
 Revenue and Tax Collection

Once formalized, small-scale miners contribute to the tax base through presumptive taxes, license fees, and royalties.
ZGC’s operations create a clear value chain from the mine pit to the central bank, ensuring maximum fiscal benefit.
 Strategic Sovereignty and Resource Nationalism

Zambia takes charge of its own mineral destiny.
The model repositions gold not merely as a tradable commodity but as a sovereign economic asset.

4. Implementation Plan: Roadmap for Realizing the Vision

A program of this scale requires policy alignment, institutional collaboration, and community engagement. Here is how Zambia can move forward:

a. Legal and Policy Reform

Fast-track small-scale mining licenses and remove bureaucratic delays.
Enforce mandatory sale of locally mined gold to ZGC through statutory instruments.
Align mining, environmental, and taxation laws to support the citizen-first model.
b. Institutional Strengthening

Provide ZGC with financing and logistics capacity to buy gold in all regions.
Equip the Ministry of Mines with real-time digital monitoring tools.
Decentralize BoZ gold purchasing operations to regional centres.
c. Financial Support for Small Miners

Create a revolving fund or credit guarantee scheme through NAPSA, Development Bank of Zambia, or commercial banks.
Introduce tax holidays or incentives for registered ASM cooperatives.
d. Community Mobilization and Education

Conduct national sensitization campaigns on the benefits of formalized gold mining.
Train traditional leaders and chiefs to play a supportive regulatory role.
Establish mining extension services in local councils, modeled on agricultural extension offices.

5. Global Precedents and Comparative Advantage

Several African countries have launched similar models:

Tanzania: Introduced mineral trading centers and gold purchasing by the Bank of Tanzania, reducing smuggling by over 90%.
Ghana: Formalized its ASM sector through cooperatives and partnerships with international refiners.
Zimbabwe: Through Fidelity Printers and Refiners, gold buying was centralized, allowing the Reserve Bank to retain export proceeds.

Zambia can learn from these models but go further by ensuring a greater degree of local ownership, transparent governance, and integration with long-term industrial policy—particularly in jewelry, electronics, and gold-backed financial products.

6. Risks and Mitigation Strategies

Implementing a citizen-driven gold mining model comes with several potential risks. However, these risks can be effectively managed through targeted mitigation strategies:

Corruption in licensing or gold trading
To prevent corruption, it is essential to introduce digital traceability platforms that monitor every stage of gold production and trade. Additionally, citizen oversight mechanisms should be established to enhance transparency and accountability in licensing and transactions.
Resistance from illegal buyers
The success of a centralized gold offtake model depends on reducing the influence of informal or illegal buyers. This requires strengthened law enforcement, the creation of special mining regulatory units, and the imposition of heavy penalties on those involved in black market gold trading.

Lack of mining skills among citizens
Many artisanal and small-scale miners operate without formal training, leading to inefficient practices and safety risks. The solution is to partner with universities, vocational colleges, and training institutions to provide targeted mining courses, safety education, and entrepreneurship training for local miners.
Weak capacity at Zambia Gold Company (ZGC)
For ZGC to serve effectively as a national offtaker, its operational and technical capacity must be upgraded. This involves capital infusion from government or private partnerships, technological support, and recruitment of experienced professionals to manage procurement, logistics, and gold valuation processes.

7. Conclusion: Zambia’s Moment to Own Its Gold Future

The gold under our soil represents more than mineral wealth – it symbolizes economic sovereignty, citizen dignity, and national transformation.

By adopting a model where Zambians mine the gold, the Zambia Gold Company purchases it transparently, and the Bank of Zambia uses it to build sovereign wealth, we create a self-sustaining ecosystem. One that uplifts citizens, stabilizes the macroeconomy, and asserts control over national resources.

The model I proposed in 2018 is not only feasible—it is essential. In an era of economic uncertainty, growing inequality, and renewed interest in de-dollarized reserves, gold is no longer just a commodity. It is a strategic asset—and Zambia must act now to claim it.

Dr. Lubinda Haabazoka is an economist and public policy analyst. He previously served as President of the Economics Association of Zambia. He is Director of the Graduate School of Business at the University of Zambia and has advised government institutions on economic empowerment, mining policy, and financial sector development.

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