Wednesday, April 8, 2020

Government wants pension funds to be linked to DTC Botswana

The government of Botswana is trying to lobby for the local pension fund industry to be hocked into the diamond financing scheme which will ultimately give ordinary plan holders a share in the thriving mineral sector.

Minerals and Energy Minister, Ponatshego Kedikilwe, said last week that they are currently talking to different players in diamond banking but they would like them to partner with local financial institutions ÔÇô notably the asset fund managers in a bid to bolster the pension fund industry’s grip in the banking sector.

“I would like to see some local financial institutions participate (in the diamond banking),” he said.
The local pension industry is worth close to P 32 billion. The public officers’ pension fund established six year ago has a solid standing of P 24 billion. The public officers’ fund got a windfall of P 2.1 billion over the last five months ÔÇô thus far outpacing the foreign reserves which grew marginally by about P US $ 400 million as some of their managers, including Capital International, lost over US $ 70 billion in the last four years.
“We need to involve the local pension industry for different reasons, including the mobbing up of excess liquidity in the market,” he said.

According to the legislation, the pension industry is expected to invest up to 70 percent of the money off-shore while the rest is expected to chase limited investment opportunities.

Caught by the scale of task that is before Botswana as it prepares itself to be the diamond centre of note, government is now belatedly thinking about involving other stakeholders, such as local government, members of parliament and the private sector in a series of brainstorming discussions.

The task that lies ahead for Botswana will involve erecting the first five-star hotel in the country for US dollar multi-millionaires who will be coming here with their families every five weeks for the full year, top class restaurants that offer more than one thousand different brands of beers, hot stuffs and wines, exclusive night clubs, top notch security in town and at air ports, reliable transport system and courier services.

The new development will also need Botswana to develop its road network system, re-train public transport drivers and fillÔÇôup the remaining potholes, let alone dismantling the curbs along Gaborone roads and to have a well functioning traffic light system.

“We need a team that will deliver that. There’ll be an organization of seminars for councilors, MPs and the private sector to drive the information and try to see how we can carry them along to see what we can do together,” Kedikilwe said.

He said the issue of board members of DTC Botswana who will oversee the activities of the organization that represents the devolution of powers from DTC International based in London is still being discussed.

The new office will be headed by Brian McDonalds who is in the process of rolling out his business plan to launch the first ever international diamond trading company in the southern hemisphere.
DTC Botswana will be a 50/50 ownership of De Beers and the Botswana government with their offices located along the road to Sir Seretse Khama International Airport. The office will be responsible for sorting, valuing, marketing and the selling of the goods which will happen every five weeks.
As part of the plan to prepare for the big task, MC Donalds said they have a team of people, presently at 17 Charter Street- Central London, learning more about the diamond trade.

Kedikilwe said the new moves embarked upon by government are aimed at value addition and the creation of the much needed jobs. According to the government, the coming in of DTC Botswana will create about 3000 new jobsÔÇöfrom companies sprawled across the world ÔÇô but industry insiders say as much as 5000 jobs will be created. Most of the jobs will be indirectly linked to the business.

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