Victor van der Kwast, the father of diamond banking, launched an ambitious plan Thursday aimed at hoisting Botswana as the center for diamond banking across the continent as his group opened its offices in the country.
The move is the culmination of a threeÔÇôyear intensive behind the scenes work between the International Finance Service Center (IFSC), and ABN AMRO of the Netherlands ÔÇö the leading diamond bank in the world.
Van der Kwast said the move to set up in Botswana signals a new development in the diamond industry and, indeed, within the region.
“We would like to make a difference here and in southern Africa,” van der Kwast said, adding that the move would tighten relations with the African continent, with the view of developing the diamond beneficiation in the producer countries.
“We will close our South African (satellite) office in the near future and all the activities will be run from here,” Van der Kwast told Sunday Standard.
Under the terms of the IFSC certification, ABN AMRO will be able to do business across the African region from its offices in Gaborone.
“This is a very important development and we will take it step by step. We know that it is very important to South Africa, Botswana and Namibia as producer countries,” he said, adding that, “we would like to extend it to other countries such as Angola and Congo”.
Some of the other countries still on Van der Kwast’s radar map include Sierra Leone and Liberia, which are producer countries on the western side of the continent.
Van der Kwast is also working on a grand plan, together with the American government and Lazare Kaplan, aimed at injecting US $250 million to try to bolster the development of diamond cutting and polishing industry in Botswana.
The US $250 million is partly guaranteed by the USA government through its Overseas Private Investment Corporation (OPIC) and is expected to be finalized soon.
ABN AMRO, the twelfth biggest bank in the world is experienced in diamond financing currently operating in 46 countries and is attributable to 40 percent of the world’s diamond financingÔÇölargely at the down-stream.
“The deal is not yet finalized; what is remaining is for our lawyers to sign the contract but, before that is done , the OPIC people have to come here to do some due diligence,” head of Botswana’s Lazare Kaplan, Alfred Dube, said.
The special facility from the American government is aimed at propping up the Botswana investment, which is 75 percent guaranteed by the USA government, while 25 percent will be met by the local investors. The money is available to all 16 sight-holders in the country.
“Indeed, we have been talking to OPIC in terms of supporting the down-street market. And, mind you, this is the first time for this to happen. That is why it has taken us over two years,” he said.
The USA market is key to the diamond industry as to consume 50 percent of the world jewelry produced and Botswana, being the king rough producer, is now graduating to the level of cutting, polishing and jewelry production.
The move is expected to bring up 3000 jobs in Botswana, which are currently hanging in the balance since the global economic crisis made an impact internationally since the third quarter of last year.
The jobs were created out of the lust for economic diversification and the grand plan of beneficiation in the producer countries.
Botswana, alongside the other two southern African major diamond producing countries, namely, Namibia and South Africa, is already exercising the beneficiation process that started two years ago.
The main beneficiaries, among the local commercial banks, are likely to be Stanbic, Standard Chartered Bank and, to some extent, Barclays Bank, who are already sponsoring some of the cutting and polishing activities.
