{"id":55243,"date":"2024-09-16T07:20:38","date_gmt":"2024-09-16T07:20:38","guid":{"rendered":"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times"},"modified":"2024-09-16T07:50:17","modified_gmt":"2024-09-16T07:50:17","slug":"desperate-times","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times","title":{"rendered":"Desperate Times"},"content":{"rendered":"

Africa-Press – Botswana. <\/strong><\/span>ODC Seeks $300 Million Credit Facility To Support Larger Volumes of Diamond Purchases<\/b><\/p>\n

In a bold move to navigate the choppy waters of the global diamond market, the state-owned Okavango Diamond Company (ODC) is seeking a substantial $300 million (P3.984 billion) credit facility from local banks.<\/p>\n

The Botswana government is poised to back this request with a ten-year guarantee of P2.325 billion (US$ 175 million), a decision that underscores the critical role diamonds play in the nation\u2019s economy. Established in 2012, ODC was created to give Botswana the autonomy to sell its diamonds independently of the De Beers platform.<\/p>\n

Currently, ODC receives 25 percent of its diamond production from Debswana, a joint venture between the Botswana government and De Beers. However, the dynamics of this arrangement are set to change significantly.<\/p>\n

A new ten-year diamond sales agreement between Botswana and De Beers, coupled with mining licenses extending until 2054, is set to increase ODC\u2019s share of Debswana\u2019s production. Initially, this share will rise to 30 percent before gradually climbing to 50 percent by 2033.<\/p>\n

This shift reflects Botswana\u2019s strategic push to maximize revenue from its abundant mineral resources. However, ODC\u2019s ambitions are not without challenges. NThe company is currently only able to afford diamond purchases of up to $70 million using its own cash reserves.<\/p>\n

The maturity of a $140 million (P1.9 billion) working capital facility in 2023 has further strained its financial resources.<\/p>\n

To bridge this gap, ODC has appointed Standard Chartered Bank to structure and coordinate a new $300 million syndicated revolving working capital facility.<\/p>\n

Minister of Finance Peggy Serame, addressing Parliament, emphasized the importance of the government guarantee.<\/p>\n

\u201cThe government guarantee will crucially support ODC\u2019s increased entitlement of 30 percent to Debswana\u2019s rough supply, as well as assist the company in negotiating favourable rates in the local market on a new working capital facility,\u201d Serame said.<\/p>\n

This financial maneuver comes at a time when the diamond industry is experiencing a significant downturn.<\/p>\n

Debswana\u2019s sales have plummeted by 49 percent in the first half of the year, and ODC was forced to temporarily halt its rough sales in October last year as part of a broader industry effort to reduce the oversupply of inventory caused by weak global demand for jewelry.<\/p>\n

Despite these challenges, there is cautious optimism that the diamond market will recover by the fourth quarter of 2024.<\/p>\n

Should this recovery materialize, the availability of the new credit facility would position ODC to capitalize on the resurgence.<\/p>\n

\u201dODC\u2019s mandate goes beyond just purchasing and selling diamonds; it also plays a critical role in providing the government with insights into global market prices and trends. These insights are crucial for decision-making and are part of a broader strategy to transform Botswana into a leading destination for rough diamonds,\u201d added Serame.<\/p>\n

When ODC started operations in 2013, it was selling 12 percent of Debswana\u2019s production which later went up to 15 percent and subsequently 25 percent in 2020.<\/p>\n

However, the financial implications of the new credit facility are significant. If the government guarantee is granted, total public debt, including guarantees, is projected to reach 24.2 percent of GDP by the end of 2024\/2025.<\/p>\n

Domestic debt, including guarantees, would rise to 15.3 percent of GDP over the same period. While these figures remain within the statutory limits, they highlight the risks involved in navigating the current adverse credit market conditions.<\/p>\n

For More News And Analysis About Botswana Follow Africa-Press<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Botswana. ODC Seeks $300 Million Credit Facility To Support Larger Volumes of Diamond Purchases In a bold move to navigate the choppy waters of the global diamond market, the state-owned Okavango Diamond Company (ODC) is seeking a substantial $300 million (P3.984 billion) credit facility from local banks. The Botswana government is poised to […]<\/p>\n","protected":false},"author":84,"featured_media":55242,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,12],"tags":[234],"class_list":["post-55243","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-policy","tag-botswana"],"yoast_head":"\nDesperate Times - Botswana<\/title>\n<meta name=\"description\" content=\"ODC Seeks $300 Million Credit Facility To Support Larger Volumes of Diamond Purchases In a bold move to navigate ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Desperate Times\" \/>\n<meta property=\"og:description\" content=\"ODC Seeks $300 Million Credit Facility To Support Larger Volumes of Diamond Purchases In a bold move to navigate ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times\" \/>\n<meta property=\"og:site_name\" content=\"Botswana\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-09-16T07:20:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-09-16T07:50:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/botswana\/sites\/38\/2024\/09\/sm_1726460355.438562.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1170\" \/>\n\t<meta property=\"og:image:height\" content=\"600\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Desperate Times\",\"datePublished\":\"2024-09-16T07:20:38+00:00\",\"dateModified\":\"2024-09-16T07:50:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times\"},\"wordCount\":561,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/botswana\/sites\/38\/2024\/09\/sm_1726460355.438562.jpg\",\"keywords\":[\"Botswana\"],\"articleSection\":[\"all news\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times\",\"url\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/desperate-times\",\"name\":\"Desperate Times - 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