3.30 – 4.30p.m

Speaker: Sekela Nyange, MD,  KusKus Jewels

Speaker: Julda Makundi, Head of Mqrketing, Uru Jewellery, Tanzania

Speaker: Nancy Nyondo, MD, Manyatta House of Accessories

Both Uganda and Tanzania are endowed with gold.  Additionally, Tanzania produces a variety of gemstones, such as tanzanite, aquamarine, garnet, ruby and sapphire. Uganda’s main mineral, gold, is mined in areas like Busia, Mubende, and Karamoja (Nuggets, 2015). Tanzanite, which is said to be 1000 times rarer than diamond and estimated to have only about 30 years supply left (Tanzanite Foundation), is found at only one location in the world – the Mererani Hills of Northern Tanzania  (Tanzania Invest, 2017).

In Uganda, where artisanal mining is part of community development, and with 50 artisanal and small-scale mining associations getting established (World Bank, 2013), gold mining is mostly done by small-scale artisans. Big multinational businesses have been resisted by the locals in fear of deterring their current mining efforts and livelihood (Petricca, 2017) . Additionally, most artisanal gold is mined and exported illegally (Petricca, 2017). Most areas have not been properly explored for the purposes of commercial mining. This leaves most gold rich areas to artisans who use traditional methods to mine gold. This shows the great potential that Uganda offers since there is vast country yet to be surveyed by competent geologists.

In Tanzania, both local and foreign artisanal miners dig mainly for tanzanite (Mbele, 2015). These artisanal miners are threatened by other small miners that come into play, because these small mines endanger and entrepreneurial culture and local ownership (Mbele, 2015). Additionally, tanzanite is traded illegally on the black market by some of these artisanal miners (Mbele, 2015).

The 1^st Mashariki Creative Economy Impact Investment Conference brought together four forces in the gemstone and jewellery industries; to discuss theirs and everyone else’s role in making a mark in this billion dollar jewellery industry.

Hasnain Sajan, CEO of Tanzanite Experience, (Tanzania) stated that as a company that mainly deals in tanzanite, the main quandary that they face is that of patenting and copyrighting designs. “The software exists and can be adopted for the Tanzanian market and the rest of East Africa.”

KusKus Jewels’ co-founder, partner and creative director Sekela Nyange stated that material accessibility was her biggest problem. KusKus Jewels has not yet delved into the gemstone industry, and uncertainty still looms in the air about doing so.

Nancy Joyce Bondo’s Manyatta House of Accessories (Tanzania) deals in beads, thread, with plans to enter the gemstone market. “The main issue is that you will sit in a meeting with a government official- and he will note down your predicaments with such concern, but the concerns will remain untouched,” Bondo lamented.

Marketing Head for fashion jewelry brand, URU Diamonds Julda Makundi (Tanzania) stressed that brand awareness is a challenge, on top of high taxes.

In propelling the gold and gemstone industries forward, these were the key action points:

– Lower taxes.

– Ensure Intellectual Property Rights protection.

– Incorporate the mineral value chain in the tourism industry.

– Ensure skills development among locals.

Industry driven skills development: The Government is interested in funding industry driven skills development, and not in funding training or any sort of education. Tanzania and East Africa as a whole have a lot of natural resources that the entire region can gain from economically.

Intellectual Property Rights Protection: With regard to intellectual property; that is, registering for patents, trademarks, copyrighting design, industrial design, all companies should strive to protect their Intellectual Property. If a company gets challenges achieving this within Tanzania, the process can be escalated to the African Level, through ARIPO (African Regional Intellectual Property Organization). It is better to tackle this issue with an association of at least 5 people. With regard to the registration of trademarks, the process is effective, except with the design aspect. Copyrighting can negate the problem of copied designs. Copyrighting focuses mainly on music and film in Tanzania, but further discussions are intended for the inclusion of the gemstone industry.

Lower taxation rate deliberations: Regarding the complaints with the high taxation levels have been a problem for the gemstone and gold industries for a while. The issue of tax is to be discussed with the relevant Minister, to include them in the deliberations.

Art Policy and Fund: Additionally, the Government of Tanzania is in the middle of preparing an Art Policy and an Art and Creative Fund.

ARIPO (African Regional Intellectual Property Organization): Protection of trademarks is being done efficiently, but it is difficult to protect jewellery design. Both copyrighting and patenting protect your designs, and patenting helps when copyrighting has failed. If you cannot complete your IP Rights Registration in the country, this can be escalated to the African Regional level through ARIPO (African Regional Intellectual Property Organization) to take care of it.

Art Policy and Art and Creative Fund: The Government of Tanzania is in the middle of preparing an Art Policy and an Art and Creative Fund, to cater to the financial needs of those in the creative industry.

High tax levels and running costs: With mineral and precious stone businesses, taxes are high, so producing the final product from these stones becomes expensive

Limited brand awareness: When Uganda Tourism Board goes to market Uganda, it’s about the gorillas and their defense. When approached about why the fashion industry is not included in their marketing strategy, the Uganda Tourism Board will tell you that it is because they do not have the numbers. “Whenever we are marketing the gorillas, we know that we sell 10,000 gorillas, we know who is coming, how many people are coming, how much revenue we are going to receive. But with fashion design, we do not have all these numbers. We do not know who will come, how many they will be, how much is expected to be sold, etc” this raises the questions; How many jewellery designers have registered? How many are practising, and how much revenue do they bring in? What amount of revenue specific to the sector is the Government bringing in? Without these numbers, the industry is not formalized, which it makes it that much harder for the Uganda Tourism Board to include the Fashion and Gems Industries in their selling pitches when marketing Uganda.

Stringent Company Registration Process: A lot of the local Tanzanian designers do not want to go through the whole process of registration because they do not even know where to start – they do not know where to go. Additionally, the Business Registrations and Licensing Agency (BRELA) has an online platform but they have not raised awareness about the usage of the platform. Many jewelers are local artisans and do not even know how to turn on a computer, let alone use the Internet. Additionally, the Tanzanian Revenue Authority (TRA) officials are so quick to collect these taxes but they are not willing to explain the tax implications to the locals. The local artisans will be told, “Every quarter, you are supposed to pay this amount of taxes. But many of these local artisans are not even aware that they need to pay a certain percentage on the money that they make.”

Illegal trade of minerals: With specific reference to tanzanite, one would think that its rarity warrants it being sold at a premium. The quandary is that there is a very apparent black market in Tanzania that has distorted the price . Potential investors need further persuasion that this rare gem could lead to profitable ventures in the future.

Natural Resource Wealth: Tanzania boasts a slew of minerals – tanzanite, sapphire, gold, diamond, emerald, silver, alexandrite, to mention but a few (The United Republic of Tanzania: Ministry of Energy and Minerals). This presents significant growth opportunities from value addition from these minerals – from enabling a source of income to locals, to improving their living standards, to higher Gross Domestic Product levels.

Tanzanite Rarity: Tanzanite being 1000 times rarer than diamond (Tanzanite Foundation), has been called the hidden treasure of Tanzania and presents an incredibly unique selling point for Tanzania. With just an estimated 30 years of supply remaining in the mines, as time passes by, tanzanite becomes even more precious (Tanzanite Foundation). This striking blue jewel found only in the Mererani Hills in Tanzania, presents an opportunity to attract even more tourists and Investors to the Mining Value Chain.

Technological Advancement: Hasnain Sajan, CEO of Tanzanite Experience, stated that as a company that mainly deals in tanzanite, and also other stones such as aquamarine, diamonds, sapphire and the like, the main quandary that they face is the issue of patenting and copyrighting. Since this software actually exists, it presents the platform to create standards for gemstone jewellers.

Extensive Research: The fallback with the gold and gemstones jewellery industries is the lack of records; data. To be taken seriously, records need to be presented, so that as Jewelers, there can be published market data. It is not the responsibility of the Government to do this research, but the responsibility of the Jewelers. Today, the Jewellery Industry is worth a billion dollar one and now more than ever, jewellers can sense the competition. Everybody is looking at numbers so jewelers need to ensure that we have these numbers so that the Government can take the industry seriously.

Intellectual Property (IP) Rights Protection: If designs are deemed creative and artistic enough, then copyrights in jewellery design are established as soon as the design has been created. If it is not eligible for copyright protection, then this is when design patent protection becomes very important (Kaden, 2004). As long as the design is new and sufficiently different in appearance from all prior designs, whether or not it is sufficiently creative to be protected by copyright, design patent protection, will still cater for the designer’s creation (Kaden, 2004). There is no point having all these social media platforms to display designers’ creations, if there is a dire fear of their designs being replicated. Not being able to display their work on social media would box their marketing opportunities in and slow down jewelers’ growth

Brand awareness: Brand awareness focuses on two main areas: aggressive marketing and more exposure to tourist market. Aggressive marketing should be pursued, in order to understand how to make the population aware of this formidable stone and other minerals that Tanzania boasts.. The Government needs to put more emphasis on other aspects other than extraction. They only focus on extraction and exporting. There are actually designers in the country who can add value to the ores before they go out of the country, it helps.

As a tourist just coming into the Tanzanian city, you would not know anything about tanzanite or tsavorite, to say the least, because there is no banner as you come from the airport about any of these stones. If tanzanite and all these other mineral resources are Tanzania’s hidden treasure, then inevitably, there should be a huge placard advertising this, just as you drive from the airport. This would greatly raise awareness of the country’s wealth, and its eminent participation in the jewellery industry. I wouldn’t know anything about jewellery manufacture.

Lower taxation rates: Government also needs to help us in terms of taxes. Tanzania has a lot of mineral wealth, but many still do not know this. High tax rates that contribute to the already high running costs make it even harder for all artisans and jewellers alike to produce pieces efficiently.

Skills development among locals: The existence of natural resources does not help the economy, if the resources cannot be efficiently exploited. This being said, locals looking for prospective employment in the mining industry should be trained about the mining process and what it entails, from the actual extraction stage to the marketing and selling stage. “It is cheaper to cut tanzanite out there rather than here, mainly because of the skills’ lack in East Africa with regard to stone cutting,” Hasnain Sajan retorted. More vocational institutions focusing on the attainment of these skills is vital. These mineral resources are under-utilised.

Transparency regarding mineral location belts: People from the ministry need to tell investors where to mine. Government has information on mineral location in the mining belts. An online platform should be created for this sole purpose. On the online platform, an investor can register for a small amount and get access to these specific sites so that the time costs and such are reduced. Online indication is helpful, since it would cut down investors’ costs.

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Nancy Joyce Bondo, Partner at Manyatta House of Accessories

“I visited Business Registrations and Licensing Agency (Brella). I asked why people cannot register colour, scents. Gucci patents their scent. Tiffany & Co. trademarks their brand, they have copyright over their designs. All you need is a computer and the programme. Trade marking gives you an identity. They said that they did not have the technology, and that it was difficult. That was 10 years ago. It is still the same today. People do not appreciate what it takes to design a piece.”

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Nancy Joyce Bondo, Partner at Manyatta House of Accessories

“This craft is actually a profitable art form – but people tend to easily push this under the rug. As a company that mainly deals in tanzanite, and also other stones such as aquamarine, diamonds, sapphire and the like, the main quandary that they face is the issue of patenting and copyrighting. These days the software actually exists. Why it is exploited in countries like the U.S and not in Tanzania as well, is astounding. We too, deal in precious stones. We should be able to patent our designs.”

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Hasnain Sajan, CEO, Tanzanite Experience

“….if the creatives have worked so hard to bring the creative industry to where it is now, then it means that it is a powerhouse, so the Government has no choice but to come on board. The Government and the people in general will have to come onboard.”

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Elizabeth Mbabazi Kaggwa, Visual Arts & Content Manager, Uganda

“You can go to a site that has been exhausted. The ministry should help with where to mine these minerals precisely. The Government needs to share with people where the minerals are exactly since they have the plans of the belts. People from the ministry need to tell investors where to mine. More education concerning mining is also needed. Again, you can put an online platform and register for say $5, and get all the information that you need. So that everyone can know that they are in a good or bad area. Online indication is good and it is helpful.”

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Hasnain Sajan, CEO, Tanzanite Experience

“…our 3-5 year vision is to build a structure in Manyara where we deal in other stones. It will be called African House of Jewels. So we don’t just want to do tanzanite, we want to do African jewels as well – here other jewellery houses could have their own sections to sell the products. We are just doing some market research because it is more of a tourist area.”

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Hasnain Sajan, CEO, Tanzanite Experience

“Awareness of our gemstones in our country is also a problem. You’ll find people with money and are well off and they are wearing Chinese jewellery and yet we have even better stuff here.”

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Shamsa Fahari, CEO, Fahari Stones

“A lot of tourists come to Tanzania and they have heard about URU and the best aspect is that our products are very affordable. You cannot go anywhere else in the world and purchase luxury jewellery at our price range. So it being available internationally is not by design – it is mainly due to the tourists.”

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Julda Makundi, Head of Marketing, URU Diamonds

“Brand awareness is key. We have to ake our resources known, it is an investment for a lifetime. So through word of mouth, we are able to grow as a brand. We are trying to get a celebrity brand ambassador, so that every time you see them in a piece, you know that it is URU. They will be responsible for delivering the message all over the world that URU is from Tanzania. We are getting there.”

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Julda Makundi, Head of Marketing, URU Diamonds

“When the Government is attending international tourism conferences, do they make it apparent that we have Tanzanite One? Because usually, you just see stores of people in the hotel business. In terms of these tourism expos, they should capitalise on houses like URU, Tanzanite Experience. They should focus on designers as well – it is not just about hotels and national parks. If we are rich in tanzanite, we have Tanzanite Experience, URU. For the Masaai, take Enjipai, take KusKus and Manyatta. The famous designers should be there because that is tourism.”

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Nancy Joyce Bondo, Partner at Manyatta House of Accessories

“East Africans alike should be proud to wear Made in Tanzania, Made in Kenya, Made in Uganda and Made in Burundi, to help with brand awareness.”

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Sekela Nyange, Co-founder & Creative Director, KusKus Jewels

CONCLUDING REMARKS

In this billion dollar jewellery industry (McKinsey & Company, 2014), the opportunities are countless. The trends that have unfolded in the apparel sector over the last three decades appear to be playing out in the jewelry sector, but at a much faster pace (McKinsey & Company, 2014).By 2020, annual global sales are expected to be a whopping € 250 billion. The industry researchers also stress that consumer appetite for jewellery, which was once diminished by the global recession, is now more magnificent than ever. Today, the trend is actually to infuse gold and gemstones in jewellery pieces. Tanzanite, which gemologists have estimated has only about 30 years until its supply is depleted, shows tremendous promise for the future. Both blue and green tourmaline, alongside other blue gems like sapphire, aquamarine, blue topaz…are gaining a foothold (“Blue and green gems on the rise…,” 2012). Blue to violet tanzanite has become especially popular (“Blue and green gems on the rise…,” 2012). Tanzania boasts many of these minerals! Now is the time to capitalize – now is the time for impact investors, Governments, artisans and anyone else relevant to the mining value chain to act efficiently especially into East Africa’s untapped wealth. There is nothing as expensive as a missed opportunity.