ABN AMRO, the world’s leading diamond bank is said to be at an advanced stage of setting up shop in Botswana, a move that will cement the country’s position as an international diamond centre.
The Special economic committee to cabinet this week told of the move that has been made by the Royal Bank of Scotland, Santander and Dutch government-owned bank in its attempts to set up in the country.
“They have received an approval from the Dutch government (main shareholder of the diamond division) to go ahead with the Botswana project last month. Now they have submitted two licence applications, one being for IFSC to serve the whole region from here and another one for the local market,” head of International Financial Service Centre (IFSC), Allan Boshwaen, said Friday.
He added: “They are confident that the diamond industry will eventually recover.”
The development is part of a pain-staking exercise that started over twelve months ago when the chief executive of the bank’s diamond division, Fortis, Victor Van Der Kwast, announced at the Israeli Diamond Conference in Tel Aviv that they are planning to have presence in the southern African regionÔÇönotably Botswana. The bank has long secured offices at The Diamond Technology Park.
“We are quite interested to establish quickly, but as you know we have to go through the formalities of application,” Van der Kwast has told Sunday Standard in an exclusive interview.
The development is part of bolstering the diamond beneficiation process that has seen three major diamond producing countries in the southern African region, Botswana, Namibia and South Africa, operating their Diamond Trading Companies starting from last year as part of devolving its operations from London to the producer countries.
“We are looking at Botswana and South Africa. And other countries are India and Israel, including South America,” Victor Van Der Kwast said.
“The bank debt is rising within the industry but what is the problem? We have focus on the new emerging markets and the issue is how we do it better and quicker,” he said then.
Mid last year, Van der Kwast had a series of meeting in Gaborone, starting with Minerals and Energy Minister, Ponatshego Kedikilwe, before meeting with the Finance Minister and top officials at Bank of Botswana with a view of registering a bankÔÇöthat will initially exclusively deal in diamond financing.
“We want to bring global expertise to Botswana because we feel that Botswana is a great country to operate from,” he added.
ABN AMRO operates in 46 countries and has a dedicated division to diamond financing.
“Botswana is a primary producer of rough diamonds and now is getting into cutting and manufacturing jewelers. He hopes that it will ultimately be an international diamond centre though it might take a long time than China and India. Botswana is very interesting and we are doing the whole evaluation,” he said, adding that “moving to Botswana” is one of the top priorities of his bank.
“We are looking at all services and products and where we could help. Beneficiation has been a major thing for Botswana but it is not going to be the only thing,” he added.
Van Der Kwast praised Botswana for its highest rating in Africa and its fiscal monetary stance. The visit by the bank is the second one after top officials of the bank’s first visit two years ago to do due diligence on the country. Two years ago, ABN AMRO and Antwerp Diamond BankÔÇöthe second biggest diamond bank in the world — visited the country following the 16 sightholders who are established in Botswana.
Botswana is expected to be fast tracked in the diamond beneficiation but the issue is still being held up by tax issues once aggregation relocates to Botswana.
The three major southern African producing countries, the United Kingdom and De Beers are still to agree on a tax formula looking at issues of rules of origin and value added. However, De Beers said early in the year that it hoped that the issue would be resolved before the end of this year.