Why Tanzania does not lead in selling its own tanzanite

Dar es Salaam. Tanzanite is a rare gemstone found in only one place on earth—Mirerani Hills, near Mount Kilimanjaro in northern Tanzania. This gemstone commands a high global value due to its unique occurrence and distinctive bluish-violet color.

Despite being the world’s sole producer of Tanzanite, Tanzania ranks second globally in the export volume of this precious stone, trailing behind India and followed by Vietnam.

According to a report by the Bank of Tanzania (BoT), Tanzanite exports from Tanzania reached a value of $19.2 million (about Sh50 billion) in 2024. However, data available online show that in the same year, India exported Tanzanite worth over four times Tanzania’s exports, amounting to approximately $80 million (Sh208 billion).

This situation persists despite efforts by the Tanzanian Government to regulate the sector, including the construction of a 24-kilometre security wall around the Mirerani mining area in 2018 to curb smuggling and illegal mining activities. Yet, Tanzania has not managed to dominate the market.

India continues to lead, exporting 19,641 consignments of Tanzanite compared to Tanzania’s 6,956 consignments, according to the international trade data tracking platform Volza (June 2024).

This stark difference raises critical questions about the existence of illicit financial flows (IFFs), smuggling, and how the country is losing billions in revenue from its unique resource.

Analysts argue that Tanzania is losing significant income by not benefiting from the gemstone’s value chain. Building local value addition capacity is seen as a potential game-changer.

Why isn’t Tanzania leading the global market?

A Tanzanite dealer in Arusha, Mr Amir Mohammed, says Tanzania struggles because there’s little value addition happening locally.

“Most of the time, we export raw gemstones. Very few are sold here as finished products. Many Indians buy the stones here and add value back home, allowing them to sell at much higher prices,” Mr Mohammed explains.

Permanent Secretary at the ministry of Minerals, Mr Yahaya Samamba, says that beyond smuggling, it is also possible that gemstones are legally exported, but due to superior technology and expertise in India, they gain much higher value there.

“Because of the advanced technology in India compared to Tanzania, they can cut even low-grade stones, adding value before exporting them. This makes their exports appear larger and more valuable compared to ours,” Mr Samamba says.

He notes that Tanzania is working on building local capacity in equipment and expertise to reach higher technological standards and reap greater benefits from Tanzanite.

On May 2, 2025, while presenting the ministry’s revenue and expenditure estimates for the 2025/26 financial year, minister for Minerals, Mr Antony Mavunde, said the ministry intends to control Tanzanite smuggling by requiring gemstone inspectors and appraisers to wear hard hats fitted with cameras.

Mr Mavunde said this measure aims to simplify monitoring and oversight of activities within the Mirerani Protected Area and gemstone markets.

“Depending on the success achieved, this initiative will be expanded to other gemstones,” the minister added.

He revealed that from July 2024 to March 2025, the ministry, in collaboration with other government agencies, managed to seize various minerals worth Sh17.75 billion in 12 mining regions.

These regions include Geita, Ruvuma, Kahama, Mwanza, Shinyanga, Kagera, Dar es Salaam, Mirerani, Simiyu, Singida, Chunya, Arusha, and Lindi.

He stated that the seized minerals were confiscated and 75 suspects were taken to court.

“I urge miners and gemstone traders to avoid smuggling to prevent losses in their businesses and to the nation,” he said.

Value addition: The missing link

Tanzanite Committee chairman, Mr Yusuf Money, acknowledges that while Tanzania is the leading seller of Tanzanite in terms of raw quantity, it lags in benefiting financially because there is little local value addition.

“When you look at the two regions of Arusha and Manyara, there’s only one value addition centre for Tanzanite. So, most of it is exported raw to countries like India and Kenya for cutting,” he explains.

He says this is why India controls the largest Tanzanite market—they are the primary value adders, and even many Tanzanite products worn in Tanzania were processed abroad.

According to Money, by failing to add value locally, Tanzania loses billions along the gemstone’s value chain. Raw Tanzanite sells for Sh200,000 to Sh300,000 per gram, while a cut stone sells for $300 (Sh780,000) per carat.

This translates to about $1,500 (Sh3.9 million) per gramme—over 10 times the value of raw Tanzanite.

He explains that one gram of rough Tanzanite yields about 2 to 2.5 carats, meaning value adders benefit far more than raw sellers, while also creating jobs in cutting and polishing.

On smuggling post-wall construction, Money says it still occurs (without specifying the extent) as smugglers constantly devise new methods.

However, he believes that increasing local value addition would reduce smuggling since sellers would be assured of better returns. He acknowledges that Tanzania lacks sufficient expertise and technology to add value at scale.

“India and Kenya overtook us in value addition. Smuggling has a big impact, but people also export to India and Kenya because they know they’ll get more value. Others do it out of greed for bigger profits,” he says.

Nevertheless, Mr Money believes the emergence of digital markets and ongoing training in value addition could reduce smuggling and boost Tanzanite’s contribution to Tanzania’s economy.

“Our dream is for buyers to come here for Tanzanite, with local auctions like in the past. We want people to come and buy here instead of waiting for Indians to deliver it to them. Digital transformation is helping—maybe our children will do even better,” he adds.

Commenting on why Tanzania doesn’t lead the global market, Money says that when Tanzanite was discovered in 1967, India and other countries quickly recognized its value, stockpiled it, and are now selling it.

“They saw its value before us, bought it cheaply, stored it, and are now selling it at high prices. You know Tanzanite is an alternative to blue sapphire, which sells for about ten times more. So, those who can’t afford sapphires opt for Tanzanite,” he notes. Experts call for investment in local processing

University of Dar es Salaam (UDSM) Economics lecturer, Prof Abel Kinyondo, says smuggling is evident, explaining why the largest producer is not the largest seller.

“In value addition, we’re losing even more—perhaps more than through smuggling. Our main problem is exporting unprocessed gemstones, so we get minimal benefits, while smugglers might gain more,” Prof Kinyondo observes.

He emphasises the need to invest in domestic value addition industries to boost other key sectors and broaden economic benefits.

Senior lecturer at the University of Dar es Salaam’s Business School, Dr Thobias Swai, also stresses investing in local value addition to fully benefit from the gemstone’s value chain.

“If we don’t invest in the value chain, we’ll keep losing more money. Even many service companies we use, like Bolt and Airbnb, funnel large profits abroad instead of staying in the country,” Dr Swai adds.

Two years ago, Tanzanite stakeholders urged the government to use its institutions to tackle individuals spreading misinformation that large-scale smuggling of Tanzanite persists despite regulatory controls.

On January 16 this year, the chairman of the Tanzania Mineral Dealers Association (Tamida), Mr Sammy Mollel, told journalists that ignoring such misinformation has serious consequences and continues to suppress the Tanzanite market.

Mr Mollel expressed disappointment with the false claims and urged Tanzanians to cooperate by identifying those spreading the misinformation.

“Since the wall was built around the mining area in 2017 and electronic surveillance systems were installed, smuggling loopholes have been eliminated. With the current controls, smuggling is virtually impossible,” Mr Mollel said.

He added that if anyone has credible information, they should provide evidence of how the smuggling occurs and reveal the smuggling routes so authorities can take action.

Mirerani Resident Mining Officer Menard Msengi, present at the time, affirmed that the government has ensured robust security and regulatory compliance from mining sites to markets, making smuggling highly unlikely.

Meanwhile, chairman of the Small-Scale Mineral Buyers Association of Tanzania (Chamata), Jeremia Kituyo, said claims of smuggling hurt their business by eroding client trust. He emphasised the need for responsible agencies to investigate and address the issue.

“We’re deeply saddened by unsupported statements claiming smuggling occurs—they damage our reputation and discourage us. Such claims portray our gemstone trade negatively, making foreign buyers perceive our gemstones as conflict minerals, which isn’t true,” Mr Kituyo said.

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