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Cape Town - A Cape Town jeweller has laid out exactly how the new visa rules on top of other negative factors have been affecting his business - and it's not a pretty story.
Responding to an article that the new visa rules could cost the SA economy R7.5bn a year, Fin24 user Dylan Evans writes: "After raising a R30k loan (and a bank balance of R1 200) from the Small Business Development Corporation I opened my doors as a jeweller in May 1992 catering to, but not exclusively though, the foreign visitors coming to Stellenbosch."
However, the days when there were "swarms of tourists strolling up Dorp Street" and "someone with a German accent entering the shop virtually guaranteed a sale" are long gone, laments Evans.
The "several small owner-managed curio shops selling gold jewellery and gemstones up and down the street" are long gone too.
In 24 years of observation he has seen ebb and flow, says Evans, but what is happening now "are the cumulative results of pigeons coming home to roost".
Crime takes its toll
Evans lists several factors responsible for the current situation, starting with crime. He tells of armed robberies and a murder among jeweller colleagues, and lists bad experiences foreign clients have been subjected to.
There have been changes for the worse: "In past years, many clients of mine returned the following year having invested in property here; they appreciated the weather and the beautiful country we have - I even had Irish people telling me they had bought apartments on their credit card while they were out here, but now every single one has sold up and left!"
As for robberies, "I can attest to millions and millions of rands worth of jewellery being stolen just in Stellenbosch alone. Where does all that gold end up, I wonder?"
Rand on the skids
Rand weakness too has had a hugely negative impact on the jewellery industry. "Which industry could deal with these sorts of increases in its raw material costs?"asks Evans. This prices locals out of the market and makes the business "highly dependent on foreign buyers".
"Selling Tanzanites to tourists has saved the jewellery trade from extinction, but now jewellers are cutting margins and cutting throats."
Red tape, technology and cheap imports
"Ten years ago under the South African Diamonds and Precious Metals Regulator legislation was introduced which ultimately saw a reduction in the number of practising goldsmiths to about a fifth of what it was before." This is because compliance was just too onerous for most small jewellers, explains Evans.
"Is it any wonder that South Africa produces roughly 70% of the world's raw gold and less than 1% of the world's finished jewellery?" Beneficiation, upskilling, training, apprenticeships and empowerment are meaningless buzzwords. And talk of creating entrepreneurs is nonsensical, because "an entrepreneur cannot be created, they are forged over time painfully between the hammer blows of necessity and failure".
Evans points out that an industry is created to supply a market: "first thing you need is customers, lots of them, on a red carpet with their foreign currency. Is it that hard to understand?"
And with the advent of sophisticated technology like CAD and 3D printing, traditional goldsmiths are becoming an "endangered species, obsolete".
Cheap imports from China and the increasing market share gained by online sales are also having a "detrimental effect". The cheek of these retailers knows no bounds: "Recently I came across a Chinese-based website selling online and listing my physical address as its own address!"
An industry in shock
Swallows - people who come here for the European winter and return to their own countries when our winter season sets in - now say they can only spend reduced time in SA on holiday visas and it is too onerous to extend their visas, reports Evans. He adds that his turnover for June "was zero, that's a first".
Evans paints a bleak picture for his industry: "Hear it from an insider on the ground who makes his living from tourists... The local jewellery trade is in shock. I experience it daily and I can see it in the eyes of my regular suppliers, people I know and have known for many years, when they call on us and we talk about how business is."
The controversial new visa rules are just "the final nail in the coffin of a declining industry". Evans points out that we as South Africans have not done this to ourselves, but that "it was our government that did it to us".
And the future? With dual citizenship, Evans intends to close shop in May next year and leave for Europe. "Perhaps I'll be back in November 2016, perhaps not. Until they close dual citizenship down too... but that's a topic for next time."
More personal accounts to follow.
Disclaimer: All letters and comments published in MyFin24 have been independently written by members of the Fin24 community. The views are therefore their own and do not necessarily represent those of Fin24.
