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Value additions on gemstones need skills to run into market competitively

Value additions on gemstones need skills to run into market competitively

The gems and jewellery industry is a multi-billion dollar industry globally. When operated using skills commanding the sector, can turn out to be a rewarding business for individuals and the nation at large.

The gems and jewellery industry can not only create huge jobs opportunities but generates foreign currency and inspires other economic sectors; such as tourism to mention a few in addition to being a safe investment for the individuals as well as for the government.

Gemstones resource for Tanzania is huge. In addition to uniquely tanzanite only found in Tanzania, there are other high priced gemstones such as diamond, ruby, emerald, aquamarine, tourmaline, amethyst, corundum, citrine, fluorite, peridot, Jasper, chrysoprase, malachite, garnet etc. and low priced such as garnet, tourmaline, quartz etc. my many years on investment on such sector tells me that Tanzania is relatively blessed with numerous gemstones due to its geological positioning.

The Tanzanian gems and jewellery sector is in my opinion very low when compared to its resource endowment in the world, contributing around very small relative to GDP.

Although the Tanzanian mining sector is expected to contribute 10% to the gross domestic product by 2025, specifically what is supposed to come from gemstones and its full potential is low. The sector employs very few at the value addition stage because of what I believe is a lack of adequately skills positioned to meet the emerging market desire.

After a detailed assessment of the syllabus in our schools, primary and secondary technical schools and universities and colleges I can confirm that Tanzanians have always not been connoisseurs of precious stones and ornaments despite various gems stones are mined.

With an exception of few dedicated centres that only produced very few graduates with marketable skills in gemstones what many don’t understand is that trade secrets of the jewellery business are something either handed down over generations, ensuring continuity of traditional craft or deliberate imparting skills to kids while at school to help them develop an interest in this sector. These are two drivers that make India today to be the world’s largest diamond cutting and polishing hub. India has been adding modern techniques to its traditional know-how that are more in tune with global market trends and this in my view is what gives India mileage in gemstone and jewellery connoisseurs.

Value addition on gemstones and jewellery in general and attaining connoisseurs doesn’t in my view need Tanzania to acquire the certificate of origin for instead in Tanzania those bestowed with the power to transform training syllabus to think out of the box on what exactly is needed and what kind of incentives needed to attract more young people to develop their career along with this sector.

Thus why, I am of the view that imparting knowledge and putting in place an environment that would attract a career in this sector to take advantage of resources available do not need empty political promises, but serious action.

Calling for processing, or value addition and trading to be confined in one place isn’t enough for the long run, the question is how are young people being prepared to acquire necessary skills demanded by the sector to be competitive?

At the inauguration of Magufuli Tanzanite centre held at Merelani in Manyara region (see Daily News 8th July 2021 front page) Mr Majaliwa the Prime Minister of the united republic of Tanzania tasked the permanent Secretary in the ministry to amend regulations that would see Tanzanite trading, processing, value addition among other things solely done at Merelani hills.

Prime Minister went further to task the officeholders to ensure Tanzanite valuation and other processes are done at the area entraining at need to open up export processing zones (EPZ) and allocation of designated plots for EPZA that would see investors setting up processing facilities etc.        

The  global  market for gems  and jewellery  today is nailed  at US$  85 billion with  key markets  having registered an  average compounded  annual growth  rate (CAGR) of  5-10% in  the last decade.

Gemstone processing and jewellery manufacturing according to sector experts is traditionally dominated by players from 3-4 countries.

Italy for instance is the world’s largest producer of fine jewellery, with about 8,200 factories annually producing an estimated US$ 6.4 billion worth with the strength of this market share lying in plain gold-mounted jewellery. Hong Kong/China, on the other hand, produces a substantial portion of the world jewellery market with strength in both gold and studded jewellery.

While Thailand in the gemstone and jewellery market continues to be a global supplier of quality jewellery over the last two decades with strength in gemstones jewellery, United States to export their goods made up of mounted gemstones around the world with its share size of its market keeping growing at home.

Sector analysis indicates that over  the years, global  markets of gemstones   have been crushed  by several  developments like  falling trade barriers,  increasing competition,  changing customer preferences and developments  in technology  in several areas. 

That proposes that the global jewellery  industry is being renovated  by  a few key trends such  as increasing competition  among top producing  countries, the emergence of different materials-different  alloys within  gold,

as well  as non-gold  jewellery, the emergence  of  new manufacturing  techniques and the requirement of  stricter quality norms and hallmarking.

In this  context,  Tanzania value addition  processes such as cutting, polishing and grading of for instance Tanzanite  to be shifted to Merelani instead of Arusha city

in my opinion, need to go beyond just shifting processing area if Tanzania is to be amongst emerging and a leading  destination for value-added gemstones business in the region and the world. 

In my opinion, the gemstone and  jewellery industry, when is well understood and political statement put aside, could occupy an  important position  in  the Tanzanian economy.

It  can be a  leading foreign exchange  earner  and also be one  of the  fastest-growing  industries in the country.

As PM Majaliwa issues orders on Merelani as far as Tanzanites are concerned, there is a need as a country to look at issues of gemstones and jewellery sector or industry in Tanzania with bigger a picture.  What are the significant future of Tanzania within the global gems and jewellery sector? What is needed to make the structure and current scenario of the sector in Tanzania thrive with homegrown craftsmen and women? What and where do we see Tanzanian’s competitive advantages in the sector? Will future outlook be on our side to play a key role in the world market with the current education syllabus in place?

Cutting  and  polishing of diamonds, tanzanite,  rhodoline, garnet,  aquamarine

etc. and other precious stones including plain metal and studded and overall value addition isn’t like value addition on beans or packaging maize or wheat flour in bags. It is a specialised and much priced undertaken that need skills, skills that need to be acquired through generation or imparted at school. 

With our house in order and out of politics Tanzanians could have added advantage in the gems and jewellery business. In my assessment, the factors  leading  to the Tanzania gems  and jewellery  industry’s growth are many.

A  near  dominance in Tanzanite and numerous coloured gemstones,  availability, forward-looking industrialists,  liberalised government policies  and an extensive international  marketing  network could help Tanzania  establish itself  as one of  the leading gemstones and jewellery centres in the region and the world. 

But this to happen, lawmakers suggestions, views, recommendations and opinions need to consider a holistic approach that would lead to how skills can be acquired and production of gemstones related products can be incentivized to be competitive in regional and global gemstone and jewellery market. 

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Author: DR HILDERBRAND SHAYO

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