Africa is rich in diamonds but still poor (Deutsche Welle – September 18, 2017)

http://www.dw.com/en/

For months now, Africa’s rough diamonds have been increasing in value but the sale proceeds do not reach the people. Instead, they benefit metropolitan elites and the mine companies, which are usually foreign-owned.

Last week Tanzanian police struck a blow against international diamond smuggling. A consignment of diamonds worth around 28 million euros ($33.4 million) was seized at the country’s main airport. Petra Diamonds, the biggest listed diamond company in the world, based in the tax haven of Jersey, had registered a consignment of 14 kilos (30 pounds.) However, according to the Tanzanian authorities, it actually weighed 30 kilos. The rough diamonds from the Williamson mine were intended for export to Belgium for processing.

The Williamson mine in the north of Tanzania is a joint venture. 75 percent belongs to Petra Diamonds, 25 percent to the Tanzanian government. Tanzania’s president, John Magufuli, has declared that combating corruption in the mining sector is a priority for his government. His anti-corruption platform played a large part in helping him to power in 2015.

Concerns about the investment climate

Benedict Mahona, an economics expert from the University of Dar-es-Salam, told DW that the seizure of the diamonds from the Williamson mine was lawful. He explained that the customs laws of the East African Community are unambiguous: Every product that is imported or exported from the area must be correctly registered and declared.

“Globally operating companies are systematically plundering Africa’s diamond resources, and only a fraction of the stones are properly declared and have duty paid on them,” Mahona said. He also commented that the theft of diamonds almost always happens with the help of corrupt locals.

At the same time, with its tough approach the Tanzanian government runs the risk of international companies withdrawing their business and jobs being lost as a result, according to Rebekka Rumpel, an expert in natural resources at the London think-tank Chatham House.

For the rest of this article: http://www.dw.com/en/africa-is-rich-in-diamonds-but-still-poor/a-40551741

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