Connect with us
Advertisement
[spt-posts-ticker]
Friday, 19 April 2024

Botswana sold itself short in De Beers deal – Gaolathe

News

Alliance for Progressives (AP) leader, Ndaba Gaolathe has said De Beers’ dealings with Government of Botswana have so far proven that the former never wanted to support Botswana’s economic ambitions given its overly dominance in key decisions.

When responding to President Ian Khama’s valedictory State of Nation Address (SONA), Gaolathe said the question should not be whether Botswana had benefited from its diamond-based growth path through the DeBeers partnership but rather whether Botswana could have benefited more under a different arrangement with De Beers, had the arrangement allowed for greater value addition much earlier on.

“Over an extended period, many far-sighted citizens argued that the cutting and polishing of diamonds locally is necessary to further local economic development ensuring that a greater proportion of value derived from diamond exploitation stays 'in country' and benefits local communities, through skills development and job creation opportunities,” he said.

“The limited employment spill overs in the current growth path have meant that many locals still live in poverty despite the high GDP per capita and Botswana being classified as a middle-income country,” he said. “Thus a desire to create jobs is a major part of what inspired Government’s move towards beneficiation in recent years.”

Gaolathe, who is the son of former Debswana Managing Director, the late Baledzi Gaolathe said De Beers’ was never keen no supporting Botswana’s ambitions, as it kept on insisting that cutting and polishing activities were not economically viable in Botswana.

Gaolathe said historically, citizens have questioned whether the DeBeers arrangement allowed the country to take full advantage of its diamond resource and whether beneficiating the country’s diamonds would not lead to greater local economic benefit through job creation.

“The concept of diamond beneficiation has therefore been driven by civic population. The Government is a late-comer to the beneficiation school of thought, a school of thought premised on the idea that diamonds can result in new and deeper linkages with the local economy,” he said.

Gaolathe said it was through civil and other pressure as well as Government’s new-found bargaining strength in 2005 that resulted in the signing of an unprecedented 25 years mining sales agreement with De Beers, in exchange of De Beers assisting Botswana in creating a viable cutting and polishing industry.

The contract included the following three agreements; a renewal of the mining licences for Debswana for 25 years, the sale of Debswana’s production to the Diamond Trading Company (DTC) International for another five years; and the establishment of DTC Botswana.

DTC Botswana is responsible not just for sorting and valuing Debswana’s production but also for the sale of rough diamonds to local manufacturers. According to Gaolathe, on paper the new beneficiation drive is manna from the sky for Botswana, through the potential multiple investment opportunities for Botswana in both the diamond and related ancillary industries and although this also gives Botswana an impeccable name of the global stage, while the hard truth is that Botswana has failed to tap on the opportunity, and have in the process missed opportunities to create tens of thousands of jobs.

He said, Botswana has missed opportunities mainly because De Beer has served its own interest not that of Botswana government. “We have missed because the span of control in the diamond industry, it seems, was structured on no clear, transparent process based on merit and that De Beers continued to dictate, at DTC, all the technical management of the company, including, pricing, categorization of diamonds, security and all diamond logistical operations. The Government continues carries little knowledge of what really goes on at DTC Botswana,” he observed.

“DTC international solely serves De Beers interest; It aggregates diamonds from Botswana, Namibia, South Africa and its mines in Canada, for allocation to its sight holders internationally, including those in Botswana. The price determination of Botswana diamonds is formulated by them. The international diamond market is influenced by them.” Gaolathe said the determination of mining of Botswana diamonds is done by De Beers and the marketing of 85% Botswana diamonds by De Beers as well.

“Botswana government has no knowledge of DTC International operations. Botswana Government should rather have traded its 15% shareholding in De Beers for shareholding in DTC International, that’s indeed if the rationale for that was to gain insight and have influence in De Beers’s operations,” Gaolathe argued. He said although Botswana owns 15% in De Beers, its representation is limited to two board members and none at operational level, yet Botswana diamonds contribute 70% of De Beers’s revenues.

“The returns to Botswana are presented as a compound figure. There is no knowing what each business unit contribute,” he said. “The Government Valuator has been an expatriate domain since the 80’s up to now. De Beers and GDV expatriates are close allies. It has been shown to be case in South Africa when the GDV endorsed every pricing De Beers paid for SA diamonds. It has been shown when Botswana GDV went to Sierra Leone with De Beers’s executives to be introduced to the Government as ideal valuators that would assist the government there. It is only recently that citizen trainees were enrolled as GDVs, but the function is 80% expatriate controlled.”

Gaolathe also took a swipe at the government owned Okavango Diamond Company (ODC) as he noted that it is as good as non-existent. “We allowed De Beers DTC to receive ODC portion direct from the mine, sort the diamonds for ODC and present them half sorted for ODC to sell to the same international market De Beers is selling to. What this means is that De Beers DTC can manipulate the assortment and make sure it matches its own, such that what ODC present to the market is exactly the same as De Beers presents. That is why there is no difference in the prices DTC and ODC fetch in the market,” he contended.

“In this case ODC has no reason to exist and its mandate should be reviewed.” Gaolathe said diamonds will remain an integral part of party of economic diversification thorough    local involvement by developing new capabilities and new niche engines of economic activity, as the civil population have always advised.

“For all the talk about the need for our country to diversify our economy, the real potent potential still remains how we best make use of our diamonds, as that engine for diversification. The way we are missing the opportunities with our diamonds typifies how we continue to miss glaring opportunities elsewhere,” he argued. “With our diamonds alone, we can inspire tens of thousands of jobs, but to achieve this we need refine and enhance our diamond roadmap and our delivery capacity and capabilities within Government.”

Continue Reading

News

Nigerians, Zimbabweans apply for Chema Chema Fund

16th April 2024

Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.

According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.

“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’

Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.

One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.

Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”

 

 

 

 

 

 

 

 

 

Continue Reading

News

Merck Foundation and African First Ladies mark World Health Day 2024

15th April 2024

Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.

I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.

As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.

Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.

Continue Reading

News

Interpol fugitive escapes from Botswana

15th April 2024

John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.

Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.

The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.

In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.

At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.

Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.

When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.

 

Continue Reading