Friday, May 20, 2022

First quarter diamonds sales hit historic levels

Botswana’s diamond exports netted over US $ 1 billion, or nearly P 7 billion, in the first quarter of this year, the highest figure ever achieved during January – March since records began in 2001.

Data released by Bank of Botswana has indicated that, in March, diamond export reached P 3 048 million, which is 50.7 percent above the corresponding period last year.

January and February recorded P 2 451.7 million and P 1 367 million, respectively.

The move was cheered by head of Capital Securities, Gregory Matsake, who said if the momentum could be maintained, it points to a more positive outlook as the economy is struggling to come out of repeated budget deficits occasioned by the global economic crunch.

The move also comes at a time when government is besieged by trade union activities, clamouring for wage increase after being stagnant for three years.

Government has been running huge budget deficits in the last two years partly blamed on  projects costs over runs, politically-motivated phoney projects, such as Ipelegeng, weekend football, backyard gardening and ever rising Directorate on Intelligence and Security Services (DISS).

“This is good news for the economy because income derived from diamond sales will in turn improve the standing of government coffers. It will mean that going forward, government will be able to embark on planned projects in a more flexible way,” head of Capital Securities, Gregory Matsake, said on Monday.

Presently, Botswana has five diamond mines with four run by Debswana Diamond Company ÔÇô a 50/50 joint venture between De Beers and Botswana government ÔÇô while the other one is operated by Firestone Diamonds.

Further, some of the diamond exports include polished diamonds that are being treated by the 16 diamond cutting and polishing companies that are aiming to develop the down-stream diamond activities.

The new development is in line with diamond analysts’ predictions that the diamond market strengthen during the course of the year following the worst global economic recession since World War II.

Botswana’s economy is heavily reliant on diamond export that contributes over 30 percent to the Gross Domestic Product (GDP), and over 50 percent of government revenue.

“It is not clear as to whether our economy is out of the woods, however, because the biggest risks are the major consuming countries, notably United States of America and Japan that are still struggling to come out of the recession. But that demand gap is likely to be filled in by China and India who are increasingly becoming major players in diamond consumption,” Matsake added.

Earlier this year, Gem Diamonds’ Chief Executive, Clifford Elphick, said his company is embolden by the rising┬ájewelry sales┬áin United States of America and┬áAsian markets.

“The reports of strong diamond jewellery sales in the important US Christmas season, continuing growth in sales of diamond jewellery in Asia, specifically China and India, and the fundamental supply demand imbalance, has meant strong┬árising prices for rough┬ádiamonds and, to a lesser extent, polished diamonds,” he said.

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