Diamonds have assumed strategic significance and could soon be to Zimbabwe what oil is to Saudi Arabia. In fact, it is believed that by 2013 this country will be the largest producer of the gems, with potential to earn at least US$2 billion per year, enough to finance an entire national budget.
WITH the discovery and commercial exploitation of diamonds in Marange, millions of Zimbabweans have pinned hopes for a better standard of living on the resource although the real benefits have so far not accrued to the ordinary man.
The mining and sale of the gems have largely remained far-fetched processes exclusive to a few, with very little, if anything trickling down.
It is against this background that we applaud the bold move by Cabinet this week to allow the State to own 100 percent of all alluvial diamond mining activities in this country. This is the way to go as the country seeks to harness its resources to improve the economy, hence the welfare of its citizenry.
We hope Parliament will move with haste to put in place the necessary laws.
Diamonds have assumed strategic significance and could soon be to Zimbabwe what oil is to Saudi Arabia. In fact, it is believed that by 2013 this country will be the largest producer of the gems, with potential to earn at least US$2 billion per year, enough to finance an entire national budget.
Statistics show that the world market for rough diamonds is valued at US$19 billion annually while the retail diamond jewellery sector is estimated at US$90 billion.
Therefore, we need to make the most of this God-given resource and better our lives and even those of future generations.
Thus, if the State gains control of the mining and processing, the revenue accrued therefrom will directly benefit the country at large while enhancing Government’s capacity to determine the allocation of such benefits.
Alluvial diamond mining is not a very complicated process hence Government should be able to mobilise skills in this regard. Training will be required for beneficiation, with small companies and other such gaining opportunities to cut and polish and even retail the gems.
These measures should leave the State with more resources at its disposal.
Government expenditure in recent years has been minimal because of lack of fiscal space hence revenue generated from diamonds and other minerals should give it more muscle while ensuring such projects as infrastructure development and social welfare are adequately financed.
Its failure to sufficiently remunerate the civil service could soon become a thing of the past given the potential resident in the diamond sector in particular and the mining industry in general.
A few months ago the Zimbabwe Mining Development Corporation declared a US$30 million dividend to Government.
Had the State fully owned the diamond sector, much more would have been injected into the fiscus.
The economy needs significant funds to boost turnaround efforts.
The proposed Community Share Ownership Scheme through which local communities will be entitled to 10 percent of gross profits should also give impetus to efforts to uplift such communities.
The funds will be used for health, education, roads, agricultural activities and others as desired by the respective communities.
Gone are the days when locals would just watch while their resources were taken away.
This move will also promote ownership of resources by locals while discouraging leakages and other illegal mining activities.
For instance, the people of Marange should be able to enjoy the fruits of diamond mining in a more legal and structured manner as opposed to illegal and costly activities that welcomed the discovery of diamonds in that part of the country a few years ago.
While this may prove too bitter a pill to swallow for some investors, the new requirement for Government to also own 51 percent of all new mining projects bodes well for Zimbabwe’s socio-economic development.
Investors will need to understand the importance of any country to own its resources.
It is only logical that that happens.
It is time Zimbabwe and other African countries were in control of their God-given resources.
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