Wednesday, October 4, 2023

A Penny for our diamonds … no dice says govt!

Former De beers Chief Executive Officer and Botswana Business and Economic Advisory Council (BEAC) deputy Chairman, Gareth Penny, has made a proposal to government to be offered a stockpile of diamonds in exchange for construction of infrastructure across the country. 

Observers are accusing Penny of conflict of interest because as head of BEAC he is chief advisor of the Botswana government on economic and financial matters. BEAC, which was former president Festus Mogae’s kitchen cabinet, was established in August 2005 to address the challenge of economic diversification away from minerals. The work of the Council culminated in two documents: Botswana Excellence – A Strategy for Economic Diversification and Sustainable Growth and the Action Plan. The Action Plan details projects aimed at driving implementation of the Economic Diversification and Sustainable Growth Strategy. The Action Plan and the Strategy were approved by Cabinet in December 2006 and November 2008 respectively.

BEAC made up of expatriate experts was maligned as a Trojan horse of foreign interests to plunder Botswana’s economy. This was after the BEAC boss Nico Cypionka used his influential position to push through the sale of Botswana to SA Air link. The sale fell through after Sunday Standard exposed how Cypionka stood to personally benefit from the shady sale.

Penny who was Cypionka’s deputy is yet to respond to a questionnaire that was sent to him two weeks ago. Government spokesperson Jeff Ramsay, however, told Sunday Standard that, “…note that the Botswana Economic Advisory Council was abolished some time ago. Gareth Penny is thus not its head as the position no longer exists.”

Ramsay explained that Cabinet decided to abolish BEAC and replace it with Economic Committee of Cabinet. “The Economic Committee of Cabinet has been there since the time when Sir Ketumile Masire was the (country’s) president. Cabinet just decided that BEAC should be abolished and make use of the Economic Committee of Cabinet; it has more people than BEAC,” he said.

Ministry of Minerals Energy and Water Resources spokesperson Potso Thari confirmed to the Sunday Standard that, “it is correct that Mr. G. Penny submitted a proposal to Government in February 2016.”  

While Thari would not disclose details, he said the “proposal was not acceptable to government.”  According to Thari, since the government could not accept Penny’s proposal, the two parties did not discuss the matter further.

There are claims that Penny’s proposal was informed by a huge stockpile of diamonds in Botswana government’s possession. Thari, however, denied the reports stating that “it is not true; Botswana does not have stockpiles of diamonds. Debswana carries the normal operational inventory”.

She added that: “There is no stockpile being built or in existence. Debswana runs its production just to produce to match demand.”

“This strategy was adopted as one of the means to reduce operational cost, hence the decision to put Damtshaa mines under care and maintenance and run Orapa Mine and reduced outputs.”

But an insider dismissed the government’s claims saying stockpiles of diamonds are always in abundance. “I’m confident that Mr. Penny’s offer or proposal to the government was premised on the fact that there are always stockpiles of diamonds ever since the global economic downturn,” he said. The insider added that “as an industry expert with valuable knowledge Mr. Penny could have used inside information to moot the proposal and he knew where he would find a market for these stockpiles of diamonds.”

According to the insider, “when prices are low and the market is flooded with diamonds, the government may decide not to sell; hence stock piles”.


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