Budget boost as diamond sales hit records

Digging deep: Debswana sales reached a five-year peak in 2021 PIC: DEBSWANA.COM
Digging deep: Debswana sales reached a five-year peak in 2021 PIC: DEBSWANA.COM

Debswana sold rough diamonds worth P38.1 billion last year, the highest since 2016, as the precious stones powered back from their COVID-19 induced downturn to anchor the economy’s revival.

BusinessWeek can reveal that state-owned diamond trader, Okavango Diamond Company (ODC) also sold $963 million (P11.1 billion) worth of rough diamonds in 2021, an all-time high for the 10-year-old company. Debswana sells 25% of its production to ODC and the balance through the De Beers sales platform.

The diamond rebound in 2021 came after a troubled year in which COVID-19 played havoc with the diamond sector, disrupting auctions of the precious stones in Botswana, while lockdowns in key markets interrupted consumer purchases. The pandemic also dampened consumer demand for diamond jewellery, whose purchases are directly linked to the levels of rough diamond production in countries such as Botswana.

Preliminary figures released by the Bank of Botswana this week indicate that Debswana’s sales last year were 61% higher than in 2020 and about 17% higher than the pre-pandemic year of 2019.


The higher sales from Debswana in 2021 were underpinned by a 35% jump in production to 22.3 million carats, the highest since 2019, according to figures published by Anglo American. Anglo American holds 85% equity in De Beers, with the Government of Botswana holding the balance. De Beers holds 50% equity in Debswana alongside government.

At the ODC, sales last year reached US$963 million, an increase of 350% over the earnings achieved in 2020.

“The demand for natural rough diamonds remained strong throughout 2021 driven primarily by positive market sentiment in key markets such as the United States,” ODC communications coordinator, Dennis Tlaang told BusinessWeek. “Sales in 2020 dipped as a result of the COVID-19 global pandemic which resulted in ODC having to cancel some of its sales as travel restrictions across the world set in.”

He said the diamond trader had already seen higher than normal price increases in the one auction it has held since the beginning of the year.

“We believe this is a good indicator of the market dynamics of 2022, at least for the first half of the year. “Still, the threat of COVID-19 continues to be a pressing issue that we continue to monitor. “The company will continue to drive customer participation by marketing its rough diamond assortment in key markets such as Antwerp and Dubai,” he said.

The ODC sells its rough diamonds via its online auction platform, after viewings held in Gaborone, Antwerp and, for the first time last year, in Dubai.

The strong diamond performance augurs well for fiscal authorities who are battling budget deficits and economic stagnation, largely as a result of the pandemic.

The Finance Ministry recently projected that Botswana’s growth for 2021 could top 10% based on the rough diamond rebound. In September, the ministry revised its growth for 2021 to 9.7 percent, from 8.8 percent, citing a better than expected rebound in the diamond sector.

On Wednesday, analysts at Rand Merchant Bank said Debswana’s performance bodes well for the country "from a growth and fiscal perspective".

Full-year economic growth figures are due to be announced on March 25.

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