DTC relocation: Is Botswana ready?
Amid reports of angry De Beers sight holders, in-fights by De Beers’ top executives, and a debate regarding the readiness of Botswana, Diamond Trading Company (DTC) relocation to Botswana is finally here.
It remains a matter of debate as to whether or not Botswana is ready to handle the magnitude of the DTC operations here in Gaborone. Diamond industry watchers maintain that Botswana has been too slow in preparing the country for the DTC relocation. They point specifically to Botswana’s infrastructure, ICT sector, Internet services, the banking and financial sector as far from the international standard expected by diamond traders and sight-holders from a city as developed as London.
Of late, Varda Shine also resigned from the DTC CEO position after some differences with DTC management. Paul Rowey will reportedly take over as executive vice president. Shine has spearheaded the DTC relocation to Botswana and is said to have done more than enough to ensure smooth sailing of the relocation. Her resignation comes ahead of the launch of the DTC relocation that will be held this week Thursday. When presenting his state of the nation address, President Ian Khama said the relocation was ahead of schedule. “The sight sale in Botswana is now scheduled for next week on November 11th,” Khama said.
At Botswana Institute of Development Policy Analysis (BIDPA) senior researcher Professor Roman Grynberg worries about developments of Airports in Botswana and the flight movements that would not inconvenience sight holders and diamond traders. He questions the quality of airports infrastructure in Botswana. Currently the Sir Seretse Khama International Airport (SSKIA) is still under construction.
DTC Relocation Coordinator at Botswana Diamond Hub Mmetla Masire acknowledges the challenge. However he said the fact that it is under refurbishment shows an effort to try and up its standard. “We have pushed for the refurbishment of the lounge, and now the VIP lounge is underway to at least have a comfortable recreational area,” Masire said. Just recently there has been unrests at the De Beers offices in London. First were the reports of sight holders petitioning the DTC over the relocation, which they said would not favour their grading given Botswana’s developments as compared to the United Kingdom. Mark Cutifani, the Chairman of De Beers who is also Chief Executive Officer of Anglo American was quoted in the media confirming the protests by sight holders, who argued
Gaborone was too far and less developed. Cutifani was quoted further dismissing the sight holders, saying they had a bad mentality and that the relocation would not be compromised. There have also been unrests at the De Beers offices in London. Former Bank of Botswana (BoB) Deputy Governor and Head Researcher at Econsult Dr Keith Jeffries worries about Botswana’s Internet access and Infrastructure, which he says is still lagging behind. He was talking of 5-star hotels, up-market malls with access to fast Internet. Currently only Lansmore hotel carries a five-star brand, while other hotels are trending below. Masire however takes solace in the fact that Botswana Diamond Hub has pushed to have a P5 million Internet fibre cable installed within the Diamond Enclave, where most of the diamond traders and sight holders would be doing business. “We have also engaged all the hotels around Gaborone to have them install a 3G Internet access with wireless connectivity for the convenience of the clients, some of which would be DTC traders,” he said.
Dr Jeffries on the other hand is satisfied with Botswana’s financial sector. “The sector especially the banks here, have the capacity to fund, and handle transactions on behalf of diamond traders,” he said. Masire said banks in Botswana although they are not specialist on diamond financing, have the capacity given that they are international outfits who have handled transactions of such magnitude before. “Barclays Bank for example, originates from the United Kingdom (UK). They have financed diamond traders and are very superior in technology and softwares needed to handle huge transactions. We are positive that if need be, skills would be transferred to Botswana to handle this relocation, just like it would happen with First National Bank (FNB), Standard Bank and Standard Chartered,” he said. He also took note of Bank of India (BOI) the diamond specialist bank. Its managing Director Ajit Kumar Mishra said they have already talked to some sight holders and diamond dealers who would need funding.
“Although we are a small establishment here, to some extent we are ready and we know we can handle the DTC relocation,” said the BOI MD. BOI has been operational for at least six months here after its approval by the Bank of Botswana (BoB). Concerns over the banking sector’s readiness is over the fact that diamond sales here are going to open way to over P60 billion worth of diamond transactions passing through Botswana’s banking sector. It also comes in the wake of ABN AMRO Bank N.V. announcing the closure of its office in Botswana, which currently includes a small team from International Diamond and Jewelry Group (ID&JG).
“Whilst recognising the important and favourable position of Botswana within this sector, the scale of the bank’s operations in the country in the context of its global platform is too limited to be sustainable,’ the bank announced.
The bank said it was actively engaging in dialogue with each client to find an optimal solution, related to the continuation of the business in the region from other locations. The ID&JG operations in Botswana are subsidiaries of ABN AMRO Bank N.V and had only four people employed. Dr Jeffries however said the pulling outof on ABN AMBRO would not have any negative effect.
