Wednesday, August 22, 2007

Gemstones: Zambia losing $7BN.

Gemstones: Zambia losing $7BN.

PRESIDENT Mwanawasa has revealed that Zambia is losing an estimated US$7 billion annually due to the rampant illegal exports of gemstones by dubious business people. President Mwanawasa was speaking at the official opening of the Gemstone Processing and Lapidary Training Centre in Ndola yesterday. Government and donors spent K2 billion and US$80,000, respectively, on the establishment of the centre.

The President said Zambia’s gemstone deposits could act as a catalyst for employment opportunities in the small and medium-scale enterprises (SME) sector and accrue to the nation a lot of foreign exchange.

So far, 50 people have been trained in gemstones polishing.

The centre is under the Ministry of Science, Technology and Vocation Training.

"Zambia is endowed with numerous precious and semi-precious stones that can fetch billions of Kwacha on the world market.

Nearly every province has its share of gemstone deposits,” he said.

"Zambia is estimated to account for 20 per cent of the world production figures with a value of about US$7 billion per annum."

Unfortunately, Zambia was not earning much from its vast gemstones wealth largely because the gems reached the market in very raw form due to lack of skill and appropriate technology for value addition among small-scale miners.

Mr Mwanawasa said the gemstone sector was characterised by rampant illegal trading accounting for more than 50 per cent of the country’s total production.

But with the opening of the training centre, the President was hopeful people living in the gemstone mining areas would now be able to acquire lapidary skills and own businesses in the precious stones sector.

"It is really ironic that people surrounded by rich deposits of expensive minerals should be poor while a few from distant places should come to the gemstone areas and make huge amounts of dollars, sometimes using the poor villagers as casual labour,” he said.

"This unfair exploitation of citizens by unscrupulous gemstone dealers must come to an end.

Let people learn how to create wealth from the raw materials that God gave them by adding value to the stones and selling the polished products at established markets."

The President said graduates from the lapidary training centre would need support from Government in order to become players in employment creation and entrepreneurship development.

He said when his Government came into office in 2002, it redefined economic priorities including mining which was placed as a priority sector for income generation.

He told the gathering at the centre on the former Lever Brothers premises that they were witnessing the birth of a training centre for small-scale gemstone miners.

"Our cooperating partners, the World Bank and the European Union have spent close to US$80,000 on the purchase of equipment," he said.

Minister of Science and Technology, Peter Daka, said the establishment of the lapidary centre, the first of its kind in Zambia was a milestone because Government realised the need for Zambia to benefit from the gemstones wealth.

After the official opening, the President had a closed-door meeting with chiefs on the Copperbelt.

Meanwhile the President announced that the Chinese government has finally approved the US$39 million concession loan for the manufacture of equipment for use in road construction and rehabilitation.

President Mwanawasa announced the development in Luanshya yesterday when he commissioned the Luanshya-Masangano by-pass road.

He said the long-awaited loan was approved by the Chinese government to improve the road infrastructure in Zambia.

He said the Chinese Ambassador to Zambia informed him that the loan was signed on Thursday last week.

“I want to commend the Chinese for making the loan available.

We want to develop like yesterday and not tomorrow,” he said.

And President Mwanawasa said the Luanshya-Masangano road was an important road that led into Luanshya and also an important by-pass for heavy trucks.

The rehabilitation gobbled K33 billion.

The Organisation of Petroleum Exporting Countries (OPEC) contributed 88 per cent and the World Bank put forward 12 per cent.

Mr Mwanawasa said the road sector investment programme by Government and donors had seen investments of US$1.6 billion over a period of 10 years on the core road network accounting for 40,000 kilometres that would have been improved to good condition by 2013.

He said this should be done together with the other objectives of creating 30,000 jobs and fostering economic growth and prosperity.

“I wish to express my sincere gratitude to OPEC and the World Bank for facilitating the successful achievement of this important milestone in the road sector investment programme,” he said.

He urged the Ministry of Works and Supply to prioritise the enhancement of safety on the roads such as the Chingola-Kitwe where many lives were lost to rampant accidents.

“The RDA must endeavour to curb over-speeding and overloading on roads,” he said.

Minister of Works and Supply, Mr Kapembwa Simbao, said the ministry was yet to embark on the rehabilitation of the Kitwe-Kalulushi road.

A K7.5 billion contract had been awarded to China Henan.

And WB country manager, Mr Kapil Kapoor, said the bank was happy to be a partner with Government in its road sector investment programme.

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At 6:01 PM , Blogger MrK said...

What is the 'Zambia' Mwanawasa is talking about? The government? Which bends over backward not to benefit from the mining industry? The government, which is running 29 ministries, and which has declared most MMD ministers to be cabinet level ministers?

What exactly, is this 'Zambia' that is losing out because 'illegal' miners are not paying massive taxes, while foreign miners pay no taxes at all?

Levy P. Mwanawasa does not have the moral or ethical right to speak about illegal miners, when he is giving away the store.

"This unfair exploitation of citizens by unscrupulous gemstone dealers must come to an end."This unfair exploitation of citizens by unscrupulous gemstone dealers must come to an end. "

Oh no, no, no. It isn't unscrupulous gemstone dealers who are the problem, it is the government that is the problem. The government is simply presenting these dealers with enormously lucrative opportunities.

Let people learn how to create wealth from the raw materials that God gave them by adding value to the stones and selling the polished products at established markets."

No, let the government protect key industries they way it is supposed to do.

This center is a good idea, and there should be more of them. However, if we're talking about the rights and protections of SMEs and the people who run and work in them, it is the government that must lower their taxes, make it hard or impossible for foreigners to set up a gemstone business in Zambia, and support the industry through education, marketing, sales and all the rest of the business processes.

If Zambia is going to develop it's own industries, this is not going to happen by itself. Look at the examples of Japan, Korea, Singapore and learn about government intervention and protection of domestic industries.

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