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Investment in non-diamond sector to push up economy – UN

Botswana’s 2015 growth acceleration is expected to be mainly driven by more investment in the non-diamond sector in Botswana, the United Nations has stated.

In a report titled World Economic Situation and 2015 Prospects the analysts observe that mineral rich countries like Botswana are expected to build up on their growth momentum accelerate from 3.4 per cent in 2014 to 4.1 per cent in 2015.

“Increased investment in copper, coal and diamonds as well as mineral discoveries in Botswana will account for the growth acceleration,” stated the report.

Additionally, UN says the buoyant revenue from mineral taxes, income and value-added taxes, and the Southern African Customs Union revenue-sharing scheme will improve the fiscal surplus from 1.2 per cent of GDP in 2014 to 1.5 per cent in 2015.  

“The Current-account balance of open economies such as Botswana could benefit from increasing net exports as their currencies weaken owing to tighter monetary policy in the United States,” the UN says.

Meanwhile, South Africa’s economy is expected to slide as constraints on electricity supply and labour productivity are set to plague the economy for the foreseeable future.

Africa overall growth momentum to continue
All the economic groupings in Africa are expected to experience an improvement in fiscal balances in 2015. However, oil-importing and mineral-rich countries are expected to register the largest improvement of 1.2 and 1.3 percentage points, respectively, because of lower oil prices.

According to UN other factors that will contribute to the country’s improvements in fiscal balance include fiscal consolidation, the emergence of new sources of revenue and innovative resource mobilization.

Among developing countries, the U.N. report predicted Africa’s overall growth momentum will continue, with GDP growth expected to accelerate 4.6 percent in 2015 and 4.9 percent in 2016.

Because of falling oil prices, the North African oil-producing countries are not doing as well as countries in East-Africa, such as Ethiopia, Kenya and Uganda, Calcagno said.

The UN has warned that mineral-rich countries like Botswana are expected to experience a slight decrease in inflation. The risk remains that declining commodity and oil prices and tighter monetary policies in the United States could negatively weigh on the currencies of both oil- and commodity-exporting countries, leading to imported inflation.

The report anticipates that East Asia will remain the fastest-growing region, expanding more than 6 percent.

EPA’S are lopsided
The UN has advised that the impact of the Economic Partnership Agreements (EPAs) between the European Union (EU) and African, Caribbean and Pacific (ACP) countries needs to be considered in the context of Africa’s structural transformation and industrialization agenda.

“Africa’s exports and imports have expanded more than fourfold over the last twelve years. However, this expansion has mostly stemmed from an increase in prices rather than volumes, while the growth of exports in volume terms was increasingly outpaced by that of imports,” says UN.

The organization pointed out that long-term economic impact of EPAs will be determined especially by the pronounced and multifaceted asymmetries between the two parties. These refer not only to the economic size and level of development of the two regions, but also to two key facets of their bilateral trade relations:

“Although it has been declining, the weight of the EU as an export market for Africa continues to significantly exceed the corresponding importance of Africa as an export market for Europe. Africa’s exports to the EU continue to be concentrated in a narrow range of mostly primary commodities, whereas EU exports to the region are significantly more diversified. This lopsided pattern of bilateral trade relations has persisted for several decades, despite the preferential market access granted by the EU to exports from ACP countries,” stated the report.

Botswana was leading the negotiating team in the SADC region on the conclusion of the EPA’s last year.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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