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De Beers Chairman plots Botswana’s growth prospects


The Chief Executive Officer (CEO) of Anglo American, who is also Chairman of De Beers Group, Mark Cutifani used the recent Botswana Confederation of Commerce Industry and Manpower (BOCCIM) 13th National Business Conference held in Maun, to share insights into Botswana’s economic projections.

Cutifani was invited in his capacity of business leadership position to share his insights about Botswana.

His remarks focused on answering the question of how Botswana should best leverage its enviable strengths to continue the growth trajectory established in the half century since independence.  

The De Beers Chairman said he understands that Botswana has long had the desire to diversify its economy away from diamonds. He explained that despite the growth achieved, the country arguably remains vulnerable to shifts in the global diamond market.

Diversification beyond extractives in general and diamonds in particular is crucial as proven resources will eventually deplete, he explained. “It is understandable that the leadership would like to make more progress towards having a more vibrant manufacturing, services and export economy,” he observed.

Cutifani said Botswana’s development strategy should be based on clear objectives that foster long term infrastructure development, the generation of intellectual capital, enhanced access to markets, inbound investments competition and improved relationships for all stakeholders.

According to Cutifani, Botswana needs three key ingredients to drive the depth and breadth of its primary growth path.

BOTSWANA HAS TO BUILD OFF HER NATURAL RESOURCES
According to Cutifani there are very few economies that have not begun their growth path outside of the mining and agricultural sectors. He indicated that Botswana is in a fortunate position to not only have the mineral endowment but, contrary to some other developing nations, to have used it well.  

“Mineral resources are like any other natural resources; you can either use them well or squander your endowment through short sighted and inadequate policy frameworks and approaches.”

Cutifani said Anglo American stands ready to partner with Botswana government in evaluating the economic viability of natural resource projects, across a range of commodities.

The De Beers chairman said beyond mining, tourism will continue to play a key role in promoting Botswana to the rest of the world. But he warned that tourism centers must be supported with complementary attractions and superior service that will be competitive with the country’s target customer base’s choices for high quality vacation experiences.

STRONG INSTITUTIONS, SOUND POLICIES CRITICAL
Modern public governance best practice indicates that progressive, consistent, transparent and business friendly policy environments are needed for business and economics to flourish. Cutifani explained that it should be any different in Botswana. He said the country must continue to strengthen its public institutions to develop standards and norms compatible with the most successful democracies in the world.

He advised that success in this area requires a hard and honest look at the country itself and readiness to make changes where necessary to the country’s way of life norms and customs. Cutifani shared that Botswana should realize that it is competing for capital against Singapore, Brazil, Tanzania, Italy and South Africa, among other countries.

“Botswana should make it easier for foreign businesses to operate in Botswana,” and in relation to attracting Foreign Direct Investment (FDI) and ensuring the country’s global competitiveness, Cutifani advised “today living in the interconnected world, business has no boundaries because prices are global not local. States should not try and impose prices onto a producer or to cross subsidize inefficient industries by distorting prices, this compromises natural competitive advantages and opportunities and embeds inefficiently through ought an economy and society. All prices eventually come back to a global value.”

DEVELOP AND INCLUDE SOCIETY IN THE GROWTH PLAN
Fortunately for Botswana, the world’s greatest and most destructive sources of social divisions and strife (ethnicity, religion, language and class) have had relatively minimum impact on Botswana’s fabric in the period since its independence. He expressed that it is certainly encouraging that democracy, development, dignity, discipline and delivery continue to be upheld as the country’s moral code through the 5D’s roadmap. He added that this is an essential ingredient to maintaining peace, the rule of law and stability in the country.

Cutifani explained that creating opportunities through investments in infrastructure is also critical. He explained that without infrastructure sustainable growth and truly diversified economy cannot be achieved. He stressed that it is important to facilitate and build infrastructures that supports other industry opportunities, in terms of access through roads and rail but also energy and information technology services.

He also advised on intellectual capital as the most important resource it could be for Botswana highlighting that young people is more valuable than the country’s diamonds.

“The quality of Botswana’s future will be determined by the quality of its leadership and the talents the country develops and retain to take its challenge. If Botswana does not find a way to make it attractive to the country’s brightest and most talented they will be lost to a world that owes Botswana a little.”

Cutifani advised that while attracting diamond grading expertise and research activities in Botswana will generate some economic activity in the short term, but the real long term value lies in retaining the intellectual property generated by attracting the world’s young high potential talent and skilled workforce to this country.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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