Johannesburg - The United Arab Emirates has outstripped Belgium as the end destination for southern Africa’s precious stones – especially diamonds. The trade has increased 240% in the last decade. Last year rough diamonds worth US$4 billion were imported into the UAE from southern Africa.
Making sure that the UAE continues to be the largest trading hub for uncut – and polished – diamonds will be a key imperative for the World Logistics Passport (WLP), the world’s first-ever freight and logistics loyalty network programme.
“Last year we became the number one diamond trading hub in the world, overtaking Antwerp for the first time, largely due to the new silk road initiative that brings diamonds from Africa through Dubai to the mass markets of China, India and the USA,” said Martin Leake, the special adviser to the Dubai Multi Commodity Centre.
Leake was speaking at the Johannesburg briefing session for the WLP, where the Gauteng Growth and Development Agency (GDDA) became the 11th South African member to join the programme. Established in 2020 by the ruler of Dubai and prime minister of the UAE Sheik Mohammed bin Rashid Al Maktoum, the WLP initiative seeks to create a global network of partners and members to make the shipping of freight by sea, air or land more effective, cheaper and less time consuming.
Founded on sea routes and incorporating air, road and rail, the WLP sets out to make international trade more efficient, more cost effective and quicker than current global logistic arrangements allow. South Africa was the second hub to be registered after the launch in 2020 with 10 partners joining before the GGDA this week, among them Trade and Investment KZN, the Johannesburg Chamber of Commerce and Industry, the Richards Bay Industrial Development Zone, Dube TradePort Special Economic Zone (SEZ), the South African United Business Confederation, SAAFF and the SME Chamber of Commerce.
The WLP African footprint now includes hubs in five other African countries: Egypt, Kenya, Morocco, Nigeria and Senegal, while South Africa offers gateways into Angola, Botswana, Ethiopia, Mozambique, Guinea, Mali, Uganda and Zimbabwe.
The transporting of precious stones, especially diamonds, is a key focus for the WLP programme. The business is 70% rough diamonds, coming from Angola, Zimbabwe, Botswana, Namibia and South Africa, with an increasing change in the beneficiation of rough diamonds in South Africa and Botswana.
Cutting and polishing the diamonds brings with it its own logistical problems leading to Dubai to implement its own gemmological laboratory to certify the diamonds quickly en route to the cutting and polishing centres in India, far quicker than they would have been sent to Belgium traditionally. There are also added costs, since cut and polished diamonds are normally transported individually by air, while uncut diamonds can be carried in a briefcase.
The WLP programme, said Leake, would be transformational in growing this trade by cutting costs and the time involved in getting the diamonds from source to end user, by identifying logistical bottlenecks and dealing with them.
“All diamonds are transported by air; shipping them by sea would take too long. Our system is an inventory management system where working capital is very important. We need to make sure the connectivities are smooth and happen as fast as possible.”
The purpose of the WLP, explained WLP general manager Mahmood Al Bastaki, is to eradicate industry freight and trade bottlenecks wherever they occur to increase trade and stimulate the flow of cargo with a direct benefit to the economies where the trade takes place.
Since the implementation of the WLP, DP World and Emirates Sky Cargo together have boosted trade to Dubai by US$2bn, said WLP head Abdulrahman Bin Haider. The WLP has found that participants in the programme have seen trade boosted by 40% and enjoyed savings of up to 48 hours per shipment and 52% of costs in some instances.
The biggest drawcard, says Bin Haider, is the potential for South Africa.
“South Africa’s top trading partners are already WLP hubs, but only 1% of South Africa’s retail exports go to Latin America, while the Middle East only accounts for 5%. Becoming a member of the WLP opens these markets up.”
The way the WLP does that is by creating the trust and eradicating the language barriers that always hamper the development of international and intercontinental trade.
“We know the traders, we have the agents in the different countries in South America, the Middle East and Africa who speak the languages,” he said. But one of the greatest advantages of the WLP is the cutting through the different bureaucratic requirements in the different countries and, as in Dubai, creating priority lanes for customs.