Zambians must benefit from gemstone sector
Published On February 27, 2014 » 2610 Views» By Davies M.M Chanda » Opinion
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The Zambian gemstone industry has for many years been facing numerous challenges and its contribution to the development of the national economy was almost none.
Dealings surrounding this sector were in the past, not explicitly stated or expressed and therefore, the Government did not have complete and authentic data on how much the country produced or sold to the outside world.
Zambia boasts of world class emeralds that have raked in millions of United States dollars at auctions on the international market.
Despite this, the country has not been able to realise full benefits from the sector which is ranked second to copper mining.
There are a number of reasons to this, ranging from lack of major investments in latest equipment to the absence of a clear cut policy to guide investors in the sector.
This is what bred multitudes of illegal miners mainly from West Africa, who took advantage to plunder wealth from gemstone proceeds which should have benefited the Zambian economy.
A study funded by the Economic Commission for Africa (ECA) more than a decade ago, revealed that,  Zambia was losing not less than US$800 million per annum through illegal exports of gemstones to the global market and that was just a tip of the iceberg, as the country lost more than the stated figure.
But with the coming in of the Patriotic Front (PF) Government in 2011, a number of measures had been taken to ensure that the sector makes a meaningful contribution to the Gross Domestic Product (GDP) of this country.
Among the measures were to ban external auctions of emeralds so as to promote transparency in the sector and this has paid great dividends.
Since 2013, when emerald auctions started being conducted locally, the country has gained a lot in terms of revenue with the latest being the US$36.5 million which was raked in from the Gemfields auction in Lusaka.
The latest auction yielded an overall average value of $59.31per carat, representing a 10 per cent increase on the prior record for all the previous auctions held by Gemfields.
And as such, Gemfields has exceeded its annual revenue figure of US$83.7 million, set in the year ended June 30, 2012.
This is a great achievement for the sector whose dealings not too long ago, was shrouded in uncertainties denying the country the much needed revenue for economic development.
As has been evidenced lately, the auctions are set to attract more foreign bidders which will mean more revenue to be realised from the exercise.
What is important is for the Government to ensure that it assists in the area of securing cheap finance for the more than 400 small scale gemstone miners dotted across the emerald belt in Lufwanyama District, in order to upscale production capacity in the sector.
In addition, there is also the need to critically look into challenges besetting this lucrative industry which lacks among other things, professional and technical management capacity to propel the sector to higher heights.
The sector has great potential to even overtake copper mining and if all outstanding issues were taken into consideration, the industry could be at par with the mines in terms of tax contributions to the national treasury.
Benefits from this sector should begin to take a trickle down effect so that it creates the much needed jobs for Zambians, contribute significantly to the country’s GDP and eventually help reduce or mitigate high levels of poverty.

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