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Angola Diamond Reforms Buoy Country’s Finances
Mar 5, 2020 4:31 AM
By Rapaport News
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RAPAPORT... Reforms to Angola’s diamond industry have boosted the country’s tax revenue by 42% over the past two years, according to national diamond-trading company Sodiam.
While the previous method required all miners to sell rough to only eight “preferred customers” chosen by the government, the new policy instituted in 2018 enables them to sell to a wider range of buyers. This eliminated the preferential prices and discounts those customers received due to lack of competition.
Under the new rules, clients can apply to purchase rough on Sodiam’s online platform. The company then performs due diligence to ensure applicants are financially stable and are not involved in money laundering or terrorism financing.
Once approved, customers can submit online bids and purchase diamonds if their offer meets a minimum price agreed by the producer, Sodiam and an independent evaluator, Sodiam said. Since 2018, more than 120 companies have registered to purchase rough through Sodiam’s system.
“Having noted that [the old model] was seriously damaging the public finances, the current government approved the…new diamond-trading policy, which…implemented new ways of selling diamonds,” Sodiam said last week. “As a result of this set of measures, the diamond-trading system saw several improvements and positive aspects.”
The changes led to a 6% rise in revenue to $1.3 billion in 2019, Sodiam reported last month.
The company has also opened a public tender to hire three independent appraisers that will help determine the base price of rough sold at its auctions. The new method will guarantee fair market price for rough, Sodiam added.
Image: Rough diamonds from Angola. (Ministry of Mineral Resources and Petroleum Angola/Facebook)
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Tags:
Angola Diamond Reforms, Angola diamond trading policy, Rapaport News, SODIAM
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