Botswana’s diamond exports, the country’s main raw material, fell by 50% in the first ten months of the year, seriously affecting economic growth, the Central Bank revealed on Friday.
“Between January and October this year, the national company Debswana sold 22.7 billion pesos worth of rough diamonds, compared to 45.2 billion pesos in the corresponding period in 2023,” the bank said in a bulletin.
Debswana is the country’s leading diamond producer, accounting for over 95% of annual production. Under the current agreement between its shareholders, De Beers and the government, Debswana sells 75% of its annual production to the diamond giant and the rest to the state-owned diamond trader, Okavango Company.
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During the first ten months, Debswana’s sales reached an average of 2.3 billion pesos, compared to 4.5 billion pesos during the same period last year, underlines the same source.
De Beers and other producers hope their marketing efforts during the holiday season will help eliminate the oversupply of natural diamond jewelry plaguing the market. This would help recovery upstream, towards the middle of the pipeline of cutting and polishing companies, as well as upstream producers such as Debswana.
De Beers has limited its production this year. From an initial target of 32 million carats at the start of the year, the company revised its maximum production to 29 million carats, then lowered it in July to 26 million carats.
Debswana produces about two-thirds of De Beers’ annual output and the production cuts are aimed at eliminating oversupply and reducing inventories.
Declining diamond production and sales largely explains the government’s recent forecast that the economy will contract by 1.7% in 2024.
Commenting on the situation, Vice President and Minister of Finance, Ndaba Gaolathe, said the level of stocks in the pipeline is still high and economic pressures on the diamond market are expected to continue. largely during the first half of 2025.
“Nevertheless, much depends on how quickly accumulated stocks can be reduced, to allow a normal resumption of production,” he said.
The new government formed after the recent general elections is closely monitoring the recovery of the diamond sector, which would provide fiscal space for the executive’s economic agenda.
Botswana is Africa’s largest diamond producer and the world’s largest producer by value ($4.7 billion value of diamonds produced in 2023), with the Karowe mine alone producing between 395,000 and 425,000 carats each year, data shows of the Ministry of the Economy.
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