Tuesday, July 28, 2020

Tanzanite Gemstone: Changing the future of Tanzania’s small miners

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Nikhita Gautam

Article Title

Tanzanite Gemstone: Changing the future of Tanzania’s small miners

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Global Views 360

Publication Date

July 28, 2020

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Miner Saniniu Laizer with the tanzanite gemstones

Miner Saniniu Laizer with the tanzanite gemstones | Source: Tanzanian government

A beautiful gemstone with a wide range of colours, from light to dark hues of blue and violet, found only in a patch 4 kilometres long and two kilometres wide at the foot of mount Kilimanjaro in Tanzania. Existing supply of these gems would run out in about 20 years and finding it in any other region has the probability of just one in a million. Tiffany & Co, the American jewelry manufacturer, described it as “the most important gemstone discovery in over 2000 years”. Yes, we are talking about Tanzanite, the pride of Tanzania.

This rare gemstone was in news recently when a small time miner, Saniniu Laizer found two large weighing 9.27 and 5.103 kgs which are the two largest tanzanite gemstones ever found. This discovery turned the miner millionaire overnight as those pieces were sold at about 3.35 USD. He was congratulated on live television by President John Magufuli, who himself was elected in 2015 with the promise of preservation of the nation’s interest in the mining industry. Mr Laizer’s mining operation includes more than 200 miners and he intends to use the money for the development of a school and a shopping mall near his home.

In order to promote the industry, many reforms were undertaken by the  government of Tanzania. It started taking a 50% equity in all mining projects after 2010 and banned the export of large sized raw gemstones. A fence was also built  in 2018 around the whole area where Tanzanite is mined but about 40% are siphoned without paying any royalty to the government.

However the discovery of such gemstones by a small miner was made possible due to the government policy of promoting local artisanal miners. In order to foster local ownership, the government gave the land and exclusive mining rights to the artisanal miners who mostly owned small and medium establishments. Many trading centres were established by the government in 2019  to facilitate these miners sell gems and gold directly to the government and earn better revenue.

Such discoveries sound promising for the industry in the light of how extensively they are promoted, and how many effective actions the government has taken to protect the industry. This also acts as a big morale booster for the small miners to redouble their efforts and search for the gemstones more vigorously.

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February 4, 2021 4:48 PM

Kenyans turning to mobile loans in times of COVID-19

The economic impact of COVID-19 is felt on the personal finance of people across the world who are looking for ways to tide over the situation. In Kenya, people are lapping the short-term credit in the form of digital loans by mobile money operators. The number of people taking digital loans has doubled during the COVId-19 induced lockdown period.

Boston Consulting Group's Consumer Sentiments Survey conducted in April and May 2020 reported that "In May, 29 percent responded that they had taken out a short-term loan, compared to 16 percent in April. Mobile money operators were the most common sources of this credit”

Kenya is a pioneer in using mobile money transfer services as the key tool for providing financial inclusion to its citizens. A simple money transfer service, M-PESA launched in 2007 has transformed the financial service industry in Kenya. Today mobile money operators are providing multiple services like digital loans, marketplace for small businesses and farmers.

Digital loans are easy to process and disbursed but there are concerns of shaming the defaulters and compromising the data security of clients. The Digital Lenders Association of Kenya (DLAK) which is a body representing the digital lenders of Kenya has distanced from two of their members, Okash and Opesa over unethical practices. These mobile apps have shared the details of defaulting customers with the moneylenders and asking them to recover the money.

DLAK also stated that Opesa and Okash are known for attacking a client's data privacy which is against the Kenyan data protection laws and has additionally spoiled the reputation of digital leaders in Kenya.

In April 2020, Central Bank of Kenya barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus. A huge number of Kenyans have been recorded on Credit Reference Bureaus by digital money lenders for loans as little as $5.

Central Bank of Kenya governor Patrick Njoroge told during a press conference in May 2020 that the central bank in consultation with the mobile money operators and digital lenders is presently working to develop a model where the borrowers are protected from mistreatment of online moneylenders.

The borrowers are looking up to the regulatory authorities and the industry bodies to come up with a mechanism which will protect their interest in times of such a health and economic emergency.

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