Raw Materials Research and Development Council (RMRDC) was established to boost Nigeria’s economy through research and innovation. This, the agency is doing with its intervention in the gemstone sub sector; BINTA SHAMA reports.
Nigeria is endowed with over 44 different solid minerals including gemstones in large quantities. These includes, Corundum, Beryl, Quartz and its varieties, Tourmaline, Garnet, Aquamarine, Topaz, Spine, etc. Some of the gemstones like Sapphire, Emerald, Aquamarine, Beryl, Tourmaline, Zircon, and Garnet amongst others are the world’s most scarce precious gems. Most of the deposits are available in very large commercial quantities in the country. Nigeria’s Tourmaline for instance, comes out in multiple colours from the same pit and the quantity is usually in kilograms and tons. Nigeria’s Paraiba Tourmaline found in Oyo and Nasarawa States, for instance, could go for as much as $5,000.00 per gram. Also, precious gems like Beryl, Aquamarine, Sapphires, Zircon in bubble-gum, pink and water melon Tourmaline grades from green to red can only be sourced from Tibet, Nigeria, Afghanistan and Brazil.
Mining sector’s contribution to GDP
The mining sector contributes less than 0.3 per cent of the Gross Domestic Product (GDP) of the nation. This is due to a number of reasons among which are lack of geoscience information-a barrier to investment-and the low level of minerals value chain development. Gemstones are one of the key economic and industrial minerals in Nigeria. They are natural organic matter, minerals or stones, which are present in igneous rocks and alluvial gravels. They are a substance of beauty when cut and polished for jewelry and they are part of alternative and complementary medicine from prehistoric times. Most gemstones are rare to come by but there are some soft minerals used in jewellery because of their lustre or other physical properties that have aesthetic value. The International Gemstone Industry is so large that the United States Jewelry Industry alone is worth over $78 billion, and it continues to grow. According to available information, gemstone imports from Myanmar in 2014 were worth $12.3 billiion. The Gem and Jewelry District of Antwerp in Belgium is a business worth £31billion a year. The District is powered by Gemstone suppliers from all over the World. The Gemstone Industry in India employs about 1,000,000 workers. According to India Brand Equity Foundation, the overall net export of Gems, Jewellery and Diamonds during April-December, 2016 stood at $43.19 billion. The Indian Gemstone Industry is also powered by International suppliers from around the world. China, India, United States, Hong Kong and Switzerland are significant importers of gemstones with the gem and jewelry business worldwide amounting to over 143 billion Euros and growing between 5-6 per cent annually. This amount is expected to reach 550 billion Euros by the year 2022. In Africa, South Africa, Zambia, and Mauritius are significant importers of gemstones. With this high demand for gemstones, Nigeria has the potential to grow its economy through the gemstones sub-sector.
Developing incentives
Despite these however, the business sector of the industry in Nigeria does not contribute its share of income generation to the nation. To ensure an effective gemstone value chain development, the sector must be overhauled by developing incentives that will revive the sector and accelerate its growth and development. This will include provision of adequate facilities that promotes testing the quality of minerals. The usual path a gem takes in getting to the client is from the mining pit to dealers, to jewelry manufacturers, to retailers, and finally, to the customers. Nigeria only operates in the first two stages of the process, which is artisanal mining and uncoordinated rough gemstones dealers. For gemstone to arrive at the final customer fit for jewelry, major steps which are included in the path are involved in processing such as panning, cleaving, bruiting, polishing, and final inspection as gemstones in its natural state have a highly irregular geometry and include many contaminations. The artisanal miners sometimes sell directly to cutters and treaters. In the case of Nigeria, cutters and treaters are not readily available. As a result, local miners have no access to cutters or treaters and sell directly to marketers or rough dealers who then transport it to cutters in cutting centers in Thailand, Sri Lanka, and India. Other challenges of this industry include the absence of facilities for certification and identification of gemstones. Available information shows that no West African country producing gemstones, including Nigeria, has a laboratory that certifies and identifies gemstones. Foreign investors can help develop the Nigeria gemstone path to reach the stages of jewelry production and sales to consumers. This will increase the capacity utilization of the sector and enable it contribute up to 10 per cent to the GDP of the country by the year 2030, if every aspect of the value chain is fully developed.
Consequently, there is a need for adequate regulation. The industry has been operating below capacity as artisanal and small-scale miners’ man mining operations in the country this dominating gemstone production. In addition, gems dealers and marketers smuggle the stones out of the country thereby evading tax. Given the current average price of $1,200 per ounce of gold in the international market, Nigeria is losing an unaccounted sum of $4,232,40 per day to illegal mining. In Asian countries such as Thailand, India, Sri Lanka, and Hong Kong, a large quantity of jewelry is manufactured by small and medium scale enterprises commercially. Entrepreneurs have not yet fully developed the jewelry business in the gemstone industry. To facilitate this however, a new association of jewelers called Gemologists and Jewelers Association of Nigeria had been formed while the Gemstones Miners and Marketers Association of Nigeria (GMMAN) was also established to organize artisanal miners and gemstones dealers in order to improve the sector. Retailers dealing in real jewelry in Nigeria are few and hardly have outlets. They deal with their customers face-to-face. Thus, efforts are being made to increase the number of genuine retailers locally. Government has also released a N39 billion intervention fund for the sector, but experts are of the view that the fund is not enough to boost the development of the sector. In addition, efforts should be made to encourage utilization of locally produced jewelries. Before 1970 in Nigeria, most women and jewelry users used local goldsmiths to design and produce their jewelry.
RMRDC interventions
In view of the myriad of problems and challenges facing the gemstone sector, RMRDC put in place a number of programmes and projects to complement other initiatives by public and private sector operatives to overhaul the gemstone value chain in Nigeria. The investment arm of the Council which is known as Business Innovations Centre (BIC) has formed a partnership with Aku Engineering Limited and Mina Stones Ltd to establish a Gemstone Buying Centre at the African University of Science and Technology (AUST) Abuja. The gemstone buying centre would create a standard market that brings together gemstone producers and buyers when commissioned. Already, the Centre has been very active in providing services to its customers. A number of gemstone miners and buyers would now depend on its services to concretize arrangements and prices. Furthermore, in order to improve the value of gemstones in the market, a lapidary had been set up since 2016 in collaboration with Mina Stones Ltd and FIRAM Investment Ltd for which with the collaborators a special purpose vehicle, called Century Cuts Ltd was established. The Special Purpose Vehicle (SPV) was created and registered with Corporate Affairs Commission (CAC) under the name ‘’Century Cuts Limited’’. Equity shareholding of BIC in Century Cuts is 35% while that of Mina Stones is 40% and FIRAM Investment is 25%. BIC provided equipment, Mina Stones provided infrastructure and FIRAM Investment Ltd. provided the furnishing. The company is expected to be at the African University of Science and Technology (AUST), where the Gemstone and Minerals Buying Centre is located. Report shows that all of these initiatives put in place, are in the process of being officially commissioned soon. The Centre is expected to be of excellent training and the coordinating body for the private sector.
Speaking further, the Director General RMRDC said, “We will be inviting other interested private sector operatives to join in. The aim of the project is to render skills acquisition training in gemology and jewelry manufacturing. To further promote activities in this sector, the Council in collaboration with a number of other partners started the African Gemstones and Jewellery Exhibition and Seminar (AGJES) as an annual event to showcase the best of Nigerian and African gemstones, precious metals and jewellery. Currently, it is the only programme in the country that brings over 200 jewellers, gemstone suppliers and gem mining industry experts together once a year to network, share business ideas, showcase trends and shape the outlook for the future of the industry. Its mission is to highlight issues which are plaguing the gem and jewellery industry in Nigeria and Africa, to unearth and bring to the fore the immense opportunities in this sector, and engage key stakeholders to seek out practical solutions for implementation in order to create an impact on the industry today that will lead to a clear path of change in the future. The effort is gradually overhauling gemstone value chain in Nigeria in several ways. It is providing training for miners and avenues for bringing together buyers and sellers, thus creating avenue for genuine investors to procure gemstones. It is also minimizing illegal exportation by providing fair prices for miners. The impact of these developments on post COVID-19 Era economic growth in Nigeria will be high. It will also facilitate job and wealth creation and increase the contribution of the sector to GDP.
