Restructuring of the Diamond Industry in Zimbabwe: A Giant Leap for Africa

Abstract

Brief discussion on the current major restructuring exercise in Zimbabwe's diamond sector, by government from a business and legal perspective. Policy evaluation reviews the regulatory regime of a typical resource economy in Sub-Saharan Africa and its epic battle against the "resource curse" (inexhaustible resource base yet with minimal national economic benefit). Diamonds like any natural resource are finite, despite their high value; emerging economies must create policies that ensure sustainability beyond the life of the resource. Zimbabwe's proposed consolidation of diamond companies must explore the business case of the transaction for the mutual benefit of government, as regulator/owner of the resource and the foreign investor, whilst avoiding expropriation. Regulation must allow room for security of tenure, less red tape, favourable fiscal regime and exploration. Zimbabwe's diamond industry has great potential, if managed with international best standards and within the rule of law.

Keywords: mining, mining law and policy, diamonds, regulation, investment, tenure, consolidation, amalgamation, business case, business transaction, expropriation, resource curse, economic potential, Kimberley Process, Sub-Saharan Africa, Africa Mining Vision, exploration, exploitation, rule of law, natural r