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De Beers inactivity Spells local Gloom

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De Beers Spells Local Gloom

Govt set to lose over P16 billion in diamond revenue

In response to the impact of Covid-19, De Beers has drastically reduced its production guidance for the year.

Initially, De Beers had set a target of mining between 32-34 million carats for 2020. The figure has since been scaled down to between 25-27 million carats due to the outbreak of the novel Coronavirus, which has led to a temporary shut down of virtually all industries.

Having suffered a disastrous 2019, the industry appeared to be gaining momentum in the early stages of 2020.

However, these roots of recovery have now ground to a complete halt.

From the two sights held this year, rough diamond sales totaled 8.9 million carats, a notable increase from the 7.5 million carats garnered at the same stage last year.

The lower demand of 2019 was largely due to the higher availability of polished stocks.

In an update to stakeholders, Anglo American – De Beers’ parent company – says sales volumes increased year-on-year despite adverse demand impacts on Q1 of 2020 from Covid-19. Customers were also given the option to defer some allocations in the second sales cycle, offset by a shift in demand towards lower value goods.

De Beers did not hold its third sight – scheduled for April – as movement of people has been restricted both locally and abroad. Instead, the company has provided its customers with flexibility to defer all their allocations from Sight 3 to later in the year.

Meanwhile, the latest developments regarding the diamond industry are expected to hit government coffers hard.

For decades, Diamonds have been Botswana’s biggest revenue earner, accounting for a large portion of the country’s exports in terms of value.

With no diamonds currently being sold due to the pandemic, Botswana stands to lose a massive amount of money.

When addressing the media recently, Minister of Finance and Economic Development, Dr. Thapelo Matsheka predicted the country could lose well over P16 billion in revenue from diamonds.

The Minister revealed government originally expected to receive around P20 billion from diamond sales for the 2020/2021 financial year. The revised figure now stands at P6.7 billion.

Additionally, government will lose more on taxes and levies from the mining industry. According to Matsheka, government now forecast making P12 billion instead of the envisaged P14 billion.

Government are set to miss out on a further billion in Value Added Tax (VAT), which is expected to fall from P8.6 billion to P7.6 billion.

The poor performance is anticipated to cause serious harm to the economy, which earlier in the year was projected to register growth of 4.2 percent.

Instead, it is now forecast to shrink by a mammoth 13.1 percent owing to the drop in diamond sales and other sectors of the economy, including transport and communications as well as hotel and restaurants.

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Battling for booze

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Battling for booze

Liquor industry wants alcohol sale ban lifted

Botswana Alcohol Industry Association (BAIA) is lobbying for government to follow the example of neighbouring countries and lift the ban on alcohol sales.

Their main reasoning being that citizens who live close to the border may be tempted to sneak out of the country in their desperation to buy liquor. They note this would be detrimental to the economy as well posing a serious health hazard.

The Association Chairman, Mothusi Molokomme told Voice Money they believe the ban – in place since 27 March – should be lifted to allow the public to purchase alcohol and consume it at home.

As much as the main focus is for bottle stores and wholesalers to open for trade, Molokomme revealed they also want bars to be opened, noting they are the only centres of distribution in some of the country’s remoter areas.

He stressed that bars should be allowed to operate on a ‘takeaway’ basis but only after they satisfy Covid-19 prevention protocols.

“The main worry is that there will be loitering around the bars. But it is our belief that operators will strictly adhere to the regulations and allow for takeaways only,” stated Molokomme.

The Chairman pointed to the recent surge in homebrews as indication that the ban should be lifted.

During the period of lockdown, the police have recorded escalating cases of homebrews, which in some instances have even led to the loss of drinkers’ lives.

“There is also a regional factor because South Africa has announced it will be opening next week. Namibia is opening as well and Zambia has always remained opened and because of our porous borders, we may see the illegal coming in of liquor,” continued Molokomme.

He said areas located along the borders of these countries pose a threat to liquor contraband.

While the association advocates for the ban to be lifted, he says as the industry, they will also intensify their message for safer consumption and promote good behaviour among consumers to exercise precautionary measures.

“We are hoping that we will reach an agreement. It will be difficult to convince government when it comes to opening of bars, but we cannot sideline the bars because, in some areas they are the only available points of sale,” reiterated Molokomme, who doubles as the Managing Director of Distell Botswana.

The association was scheduled to meet with the Minister of Investment, Trade and Industry (MITI), Peggy Serame this week to map a way forward regarding the sale of alcohol.

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Crafting a new life

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Crafting a new life

The Enterprising Welder Me and My Business

Absorbed and happy in his work as a car mechanic, an unlikely request from a client three years ago changed the course of 35-year-old Bokamoso Selthabi’s life forever.

The self-taught welder now designs and makes various products from metal, including troughs, trailers, cages, kraal fences and other farm implements.

Having initially set-up shop in the North West of South Africa, his home of three years, the Morwa native retraced his steps back to Botswana to continue Bucha Rest Welding.

Recalling the meeting that altered his existence, Setlhabi told Voice Money he was working as a mechanic when a customer asked him to build a trailer for him.

“I made the product for him. After that he brought two more guys wanting my services. From there it grew into a fully-fledged business,” he explained.

“The business has now been running for two years based in South Africa. It is only at the beginning of this year that we relocated to Botswana,” continued the multi-talented craftsman, adding he briefly explored the Namibian market as well.

While he is still new to the local market, with much of that time blanketed by Covid-19 restrictions, Selthabi admits he is yet to reach a point where he can say business is as good as it was in South Africa.

“So far it has been a bit difficult locally. Some of the products that we do like metal kraals are still not highly rated here but we are working hard to market such products as a good alternative to wooden kraals,” he noted, a steely determination evident in his tone.

Setlhabi explained that one of the perceived disadvantages of products like metal kraals is because the metal conducts heat.

However, he points out that this can be overcome by simply applying paint.

“The good thing about it is that it is durable and lasts longer than other materials used to construct kraals,” he highlighted.

Despite the current low uptake of his products, the enterprising welder is optimistic his fortunes will soon turn around.

“It is promising because, when you work with customers who are not used to what you are doing, you have to carry out extensive marketing of your products. We hope when life goes back to normal after the pandemic there will be some improvement,” he said, adding that items such as feeding containers have proved popular and are in demand.

“We also have customers waiting across the country,” he added.

Other challenges – and the one Setlhabi describes as his biggest – is copycats who attempt to duplicate his work ‘but often fail to match my skills’.

“We have social media pages where we post our products. People would want to do exactly the same but often do not succeed because our designs are unique and the quality is top-notch,” said the National Craft Certificate (NCC) holder proudly.

As the business is still at infancy stage, he has engaged one person to assist but hopes as the enterprise grows he will be able to employ more.

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