The Sunday Mail
The port city, that has been the diamond capital since the 16th century, now boasts the lion’s share (80 percent) of the world’s total rough diamonds, 50 percent cut stones and 45 percent industrial diamonds.Buoyed by the evidently lucrative diamond trade, the ensuring result has been a boom in the generation of an average US$55 billion annually and the creation of thousands of jobs for the Belgians.
Replicating the success of Antwerp, which was the first established world centre, other diamond trading centres have emerged across the globe to become billion-dollar industries and economic hubs for their countries through astute marketing of diamonds.
Dubai in the United Arab Emirates, Surat in India, Tel Aviv in Israel, and Shanghai in China are some of the cities which have followed in the footsteps of Antwerp by creating diamond centres that have brought immense benefits to their economies.
In Africa, diamond centres have also been established in Botswana, South Africa, Namibia and Lesotho on the realisation that benefits from the precious stones are not only realised in mining alone, but also by adding value through cutting, polishing and shrewd marketing.
With the Zimbabwean economy in need of fresh impetus to improve liquidity, create new employment opportunities, attract investors and implement the Zimbabwe Agenda for Sustainable Socio- Economic Transformation (Zim Asset), the setting up of a diamond centre in Zimbabwe is seen as a panacea to economic development.
Government through the Ministry of Mines and Mining Development has already said it intends to set up its own diamond centre in the foreseeable future to maximise benefits from the precious stones.
“As Government, we plan to set up our own diamond industry. However, we also encourage the private sector to set up their own, if they have similar initiatives,” the Permanent Secretary in the Ministry of Mines and Mining Development, Professor Francis Gudyanga, said recently.
However, given Treasury’s limited financial resources and growing fiscal demands, experts say it would be expecting too much for the Government to invest on the construction of such a diamond centre.
Moreover, most international diamond centres across the world are private sector initiatives where government is invited to come to participate in ways that will assist the general populace.
A consortium of private players is currently constructing the first diamond centre in the country with the aim of adding value to Zimbabwe’s stones before they are exported.
The place has potential to rake in billions of dollars into the economy through downstream and upstream industries.
Local advocacy groups have been clamouring for benefaction and value addition to the country’s gems, given that diamond revenue has not contributed significantly to the fiscus.
In the first auction, the country sold a massive 279 723 carats, only to collect about US$10,5 million, while in the second auction a whopping 959 931 carats fetched a meagre US$70 million.
Of the total revenue generated from the two auctions, only about US$12 million found its way to Treasury.
Analysts have argued that the country’s adversity seems to be working in favour of other non-diamond-producing cities such as Surat in India and Dubai in the Middle East.
They point to Zimbabwe’s inability to value add and beneficiate the Chiadzwa gems that are continuously fetching ‘‘peanuts’’ in the multi-billion-dollar global trade.
Even with that vast resource base, the country’s unemployment rate has remained high.
Interestingly, in the past few years, at least 100 000 jobs have been created in India through the Surat diamond centre. India was the largest buyer of Zimbabwe’s diamonds and Surat added value by cutting and polishing the stones.
A local non-governmental organisation, the Centre for Natural Resource Governance, recently argued that Government is capable of creating over 210 000 jobs, if diamonds are cut and polished locally.
Recent studies indicate that the country could get close to $47 billion annually from the polishing trade while about $47 billion can be generated from jewellery sales if cutting, polishing and marketing systems are put in place.
Already plans are underway to also market the diamonds locally.
After the second Antwerp sale, Mines and Mining Development Minister Cde Walter Chidhakwa said the Government wanted to auction the country’s gems locally under a makeshift exchange by June this year.
“Depending on the expertise we would have accumulated from attending international diamond auctions, we will hold our own auction sale.
“Our desire is to ultimately have a permanent diamond exchange in the country comprising of factories, auction floors, shops and so on, but at the moment we can identify places where it is secure to conduct our diamond auction,” he said then.
Cde Chidhakwa said the Government’s vision was to push for the local benefaction of diamonds as a way of empowering locals through the creation of jobs in downstream industries.
The Government remits 4 percent of its total proceeds when auctioning its gems at the global trade centres for the services provided by the host country.
Other costs on diamond tariffs, travel, hotel expenses, taxes and evaluation fees have seen Zimbabwe gaining less from exporting the gems.
The Government says diamonds are an integral component of the national economic development agenda.
Experts say the gems have the potential to boost the economy. The time has come to ensure that value-addition is taken seriously to ensure Zimbabwe derives maximum value from diamonds.