This week De Beers announced that diamonds which will be purchased from the current Sight of 2019 which is the third and runs from April 1 to 5, and onwards, where customers can refer to stones purchased from the giant mining company as “diamonds from DTC” across the value chain down to the end-consumer level.
According to De Beers, Sightholders and Accredited Buyers will be able to use the “diamonds from DTC” provenance claim across the value chain down to the consumer level, and will be able to provide assurance on its validity through certifying the claim under the Responsible Jewellery Council standards, or through an independent third-party audit. The “diamonds from DTC” provenance claim will add glitter to the ever sparkling Botswana’s diamond-led development story. Diamonds from Botswana contribute to 27 percent or US$ 4.4 billion of the GDP.
In Botswana De Beers has four companies in diamond business; De Beers Holdings, Debswana, Diamond Trading Company Botswana and De Beers Global Sightholder Sales. De Beers Holdings is the exploration arm and is currently focused on early stage exploration programmes in Tsabong, Orapa, Palapye and Kang. Debswana, a 50/50 joint venture between De Beers and the Government, is the primary producer of diamonds in Botswana.
The Diamond Trading Company Botswana, also a 50/50 joint venture between De Beers and the Government, sorts and values the rough diamonds mined by Debswana. De Beers Global Sightholder Sales is responsible for selling the bulk of De Beers’ global production to its rough diamond customers, known as Sightholders. In 2013, De Beers moved this international sales operation from London to Gaborone, resulting in growth in the volume of diamonds traded in Botswana to about US$6 billion, leading to a boost to employment, as well as downstream and other support services.
“We are proud of where our diamonds are discovered, how we recover them responsibly and the role our activities play in building thriving communities. By enabling our customers to share the source of origin of our diamonds, we hope to drive further transparency throughout the diamond value chain,” said De Beers Group CEO Bruce Cleaver this week.
According to De Beers, the “diamonds from DTC” provenance claim will offer greater significance than many other industry provenance claims, as it not only states corporate provenance, but is also supported by the provision of sustainability performance and transparency information on each of the mines of origin
Diamonds from DTC Botswana journey
Exploration of diamonds is done entirely by De Beers. Mining or production is done at Debswana, a 50/50 joint venture between De Beers and the Government, which owns mines: Jwaneng, Letlhakane, Orapa and Damtshaa. Thirteen percent of Debswana production is made available by Okavango Diamond Company, a rough diamond distribution entity which is 100 percent owned by Botswana government. Most of the Botswana diamonds are transferred to De Beers Global Sightholders Sales.
De Beers Global Sightholders Sales sells around 90 per cent of De Beers’ rough diamonds by value, via term contracts to customers known as Sightholders, at events called Sights. Rough diamonds from these mines will then be sorted and valued by the Diamond Trading Company Botswana (DTC Botswana) another 50/50 Joint Venture partnership between the Government of the Republic of Botswana and De Beers.After being valued and sorted by DTC Botswana, rough diamonds will then be sold to Sightholders or Accredited Buyers-these are a select group of clients which are certified by De Beers to be demonstrating high financial integrity and sufficient demand for rough diamonds.
In Botswana there are 20 Sightholders who have established cutting and polishing diamonds in Gaborone. De Beers sell rough diamonds through ‘Sights’ to these Sightholders or Accredited Buyers. Rough diamonds can also be sold via online auction sales. Sights which comes after every five weeks and last up for a week, the coming one slated for April 1 to 5(third one of this year), are held 10 times a year in Botswana (and Namibia and South Africa), where customers will inspect their rough diamond allocations before deciding whether to purchase them. Diamonds will then be cut and polished by diamentaires before being sold to jewelers and other retailers around the world.
Skepticism dresses the 3rd Sight
Towards the current Sight which ran this week, diamond experts around the world expected rough diamond prices to drop to drop 1 percent to 2 percent in the first half of 2019. These analysts also expected the prices to recover then end 2019 flat. London based analyst Kieron Hodgson told diamond publisher Rapaport that prices rose to 2 percent last year due to a strong first half, but the market slowed in the second half. According to Hodgson, production rose over the last two years and this led to supply outweighing demand especially in smaller categories.
According to Rapaport Weekly Market Comment, sentiment weakens after soft first quarter and dealers are avoiding large inventory purchases, and manufacturers on the other hand are reducing supply. The publication says miners are bracing for tough year as first-quarter sales decline an estimated 30 percent “Rough market under pressure, with some analysts optimistically predicting flat rough prices in 2019. Sightholders hoping profit margins will improve after next week’s sight,” says the comment.
Jewelers International Showcase
As a biggest diamond producing country backed by De Beers which is a big player in the industry, Botswana diamonds end products are expected to be among ones to be exhibited at the Jewelers International Showcase(JIS)-the second largest jewelry show in the Wstern Hemisphere. The JIS is slated for April 16-18 at the Miami Beach Convention Centre in the state of Florida, USA.
The Surat trade mission
Many diamantaries are expected to converge at the Indian city of Surat where they will be provided with an unprecedented opportunity for members of the diamond and jewelry trade to meet and interact with the diamond cutters, dealers and market makers in the world’s largest diamond cutting center. Surat is home to an estimated 500,000 diamond cutters, who manufacture over 90 percent of the world’s polished diamonds. The trip to Surat will be on April 8 to 11.
Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.
The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands. It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.
The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”
The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.
He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business. “Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.
As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.
The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.
“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.
Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.
The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies. “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.
The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.