Okavango Diamond Company (ODC) on Wednesday April 17th unveiled one of the rarest mineral discoveries in the history of Botswana, a 20.46-carat, oval-shape fancy precious blue diamond.
The diamond was discovered at Debswana Orapa mine, one of the largest open pit mines in the world, as a 41.11 carat rough stone. The stone’s unique and vibrant blue color is created by the molecular inclusion of the rare mineral boron which between 1-3 billion years ago was present in the rocks of ancient oceans during violent diamond forming volcanic activity. The blue diamond has been named "The Okavango Blue" in honor of the Okavango Delta, the Botswana’s wildlife-rich world heritage site.
From all colored diamonds, blue stones are the most unusual thus making Okavango Blue one of the rarest in the world. The Gemological Institute of America has graded the 20.46 carat Okavango Blue as an Oval Brilliant Cut, VVS2 clarity diamond, making it one of the highest polished colour classifications attainable for any blue diamond.Okavango Diamondis Botswana Governmentwhollystate owned diamondsales and marketingcompanythat sells 15 percent of Debswana productionis sorted andvalued by Diamond Trading company (DTCB) , both Debswana and DTCB are50-50 partnerships of Botswana Government and De Beers Group.85 percent of Debswana production through DTCB is made available to De Beers Global Sight holders. Botswana Government has 15 percent direct shareholding in De Beers Group of Company.
The Okavango Blue is believed to be the largest blue diamond ever discovered in Botswana, making it one of the highest polished colour classifications attainable for any blue diamond.Commenting on the discovery on Wednesday at the unveiling ceremony in Gaborone, ODC Managing Director Marcus Ter Haar said Okavango Blue sits in the very top bracket of all time historical blue diamond finds because only a very small percentage of the world's diamonds are classified as fancy colour."It is incredibly unusual for a stone of this colour and nature to have come from Botswana, this isonce in lifetime find, which is about as rare as a star in the Milky Way” said ODC MD
Tehaar further shared that ODC intends to sell the diamond by 2019 quarter 4. “From the first moment we saw the diamond, it was clear we had something very special. Everyone who has viewed the 20-carat polished diamond has marvelled at its unique colouration which many see as unlike any blue stone they have seen before,” he saidadding that however ODC wasn’t in position to speculate its value because a gem of itsnature was very rare to have any readily available and speculative market price.
In 2016, a massive intense blue diamond, known as The Cullinan Dream, sold for $25.4 million at a Christie’s auction in New York, breaking all records and becoming the most expensive gem of its kind ever sold at auction. Last year, a 6.16-carat blue diamond, secretly passed down through European royalty over three centuries, fetched $6.7 million at Sotheby auction in Geneva $1.4 million more than what diamond sales experts attached to it. Arguably, the most famous is the Hope Diamond, also known as Le Bijou du Roi also known as the King's Jewel, Le bleu de France, France's Blue, and the Tavernier Blue. The massive, 45.52-carat, deep-blue diamond is now kept at the U.S. National Museum of Natural History in Washington, D.C.
Giving a key note speech at the unveiling ceremony of Okavango Blue, President Mokgweetsi Masisi said finding a diamond of this size and shape and most significantly this colour was virtually unheard of in Botswana because blue diamonds are some of the rarest in the world. Masisi further noted that Botswana diamonds have not only given the county an enviable brand; but they have also significantly contributed to the growth of the economy. “Diamondshave immensely contributed to the creation of jobs, provision of social services like health, education and the construction of hospitals, roads as well as energy and the water infrastructure amongst others” he said
Botswana is one of the premier rough diamond producers in the world. Only Russia produces more diamond than Botswana by volume, however the country boasts of housing the world richest diamond mine by value being Jwaneng Mine which produces top gem precious stones. The Diamond sector is the heart beat of Botswana economy accounting to over 30 percent of the country‘s GDP. This industry in its entire value chain is the largest employer of after government, Debswana alone is the largest private sector employer in the country employing over 5000 people excluding indirect complementary staff.
Outside De Beers bracket, Botswana is also home to some of the world’s most prolific diamonds operation including Lucara Diamond’s Karowe operation, where the famous Lesedi Larona the second-largest gem-quality diamond to ever be found, was unearthed in 2016. Masisi said going forward government will enhance citizen participation in the diamond industry through skills development and mentoring, improving access to the rough diamond supply and funding. “Government is committed to take beneficiation to the highest level and I therefore appeal to all our partners to support our goal of transforming Botswana into a vibrant diamond centre” he saidadding that the sale ofthe highly unique Okavango Bluewill help in the promotion of our country’s proud heritage in the extraction and beneficiation of natural diamonds.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”