Thursday, July 9, 2020

News: Azizi Developments finalises Mina project on Palm Jumeirah

Azizi Developments has confirmed nearly 94 per cent of the work has been completed at its luxurious residential development, Mina. The property is located...

Editorial … End the Namdia Scam

THE GOVERNMENT has lost hundreds of millions of dollars in revenue to state coffers over the past two years for the sake of Namdia’s existence. And these are conservative estimates, based on information and hard data that should be publicly available.

Namdia (Namib Desert Diamonds (Pty) Ltd) has been in the news over the past two weeks, mainly running a public relations blitz for reasons only they can explain.

To be fair, Namdia looks like a shiny and polished parastatal. It is run like a professional outfit, compared to the majority of state-owned enterprises. The bells and whizzes of a corporate governance structure are in place.

Within two years of its existence, Namdia has publicised financials (2018 and 2017); its website is aesthetically pleasing; then the sweetener — a N$50 million dividend to a government that often is asked to bail out parastatals.

Namdia was set up to ‘test’ the diamond prices and make sure De Beers, as the seller, was not short-changing Namibia. Thus, Namdia would ensure our gem stones fetched the highest prices.

Then why have we, at The Namibian especially, published articles about a supposedly well-meaning and well-run entity?

Well, all that sparkles is not a diamond. And the N$8,1 million paid to six directors in two years, as well as N$12 million in salaries to 20 employees a year is a small indication of colossal wastage, at best, and dubious operations, at worst.

Namdia is modelled on Botswana’s Okavango Diamond Company (ODC), which sells 15% (about US$500 million a year) of that country’s rough diamond production bypassing De Beers. The similarities end there.

Botswana’s ODC conducts a transparent process — with an online-based auction system based in Gaborone. By contrast, Namdia secretly sold diamonds to five people or institutions, basing its operations in Dubai, a tax haven widely known as a money laundering hub. Why Dubai and not Namibia, Botswana, Antwerp or any place that has minimum transparency requirements?

ODC releases detailed results of its sales immediately after the auctions (www.odc.co.bw). Namdia (www.namdia.com.na) does not bother. ODC has three executive managers. Namdia has six.

Our reports, with the help of investigative journalism partners around the world, showed that Namdia sold our diamonds for US$500 per carat (200 milligramme), which the buyers resold for US$2 500.

There is a shocker: government negotiators (some now at Namdia) have seemingly short-changed the country’s revenue coffers (taxes and related income).

By breaking the agreement that makes De Beers the sole marketer of our diamonds, Namibia made costly concessions. It is through those concessions that the government loses hundreds of millions of dollars in revenue. Sadly, the latest joint venture agreement, like others before, is secret.

Namdia’s CEO, Kennedy Hamutenya, was adamant, stating in the 2018 annual report that they would not pay any dividends because the company needed the cash (which stood at N$200 million; revenue was nearly N$2 billion).

So, what was behind the N$50 million dividend paid last week? The upcoming selection of government diamond valuators?

Namdia’s very existence begs the questions: What’s its value to Namibia? Why was it set up, and remains shrouded in secrecy?

Not only is Namdia allegedly selling our diamonds for less than they are worth, but the company costs more than N$50 million a year to maintain, and it duplicates costs of the government-De Beers joint venture.

In addition, Namdia bought a property for about N$56 million. Would rental in the Namdeb building have sufficed?

Our rudimentary analysis suggests that Namdia is costing cash-strapped Namibia hundreds of millions in tax and related revenue.

If not done already, the government should urgently undertake a quantitative and qualitative cost-benefit analysis of Namdia to the country, using independent industry experts.

By the way, it’s only a matter of time before the allure of natural diamonds is rendered worthless by synthetic diamonds. And Namibia’s diamond mining is dwindling.

With that in mind, the best policy option may very well be to close down Namdia soonest and maximise the returns through tried and tested Namdeb, NDTC and De Beers.

Latest Posts

UAE dispatches medical aid Uruguay

Abu Dhabi, July 8 (BNA): The UAE today dispatched an aid plane carrying seven metric tons of medical supplies to Uruguay to bolster the...

The Emirates and Kevin Hart to make 3 wishes come true

Kevin Hart Image Credit: AP Dubai: The mission, should you choose to accept it, is to dream a dream that seems impossible....

Free COVID-19 tests for tourists at DXB

Thursday, July 9th, 2020 8:34am File Pic Tourists arriving in Dubai can get their COVID-19 tests...

UAE teams up with Kevin Hart to make dreams come true

Thursday, July 9th, 2020 7:33am Supplied Dare to dream the impossible? Then, this one’s for you....

Don't Miss

Abu Dhabi residents optimistic about return to normal life after Covid-19

The majority of Abu Dhabi residents are hopeful that life will return to normal in 2020, following the impact of Covid-19, according to a...

NOW COULD BE THE BEST TIME TO INVEST IN FOREIGN REAL ESTATE

TIPS FROM A GLOBAL REAL ESTATE EXPERT ON FOREIGN PROPERTY INVESTMENT THIS SUMMER The Estates of Acqualina Sunny Isles Beach, Florida DUBAI, UAE. JULY...

SAHAR BMD LAUNCHES SUMMER 2020 COLLECTION

Sahar BMD unveils latest collection capturing the popping and sizzling summer of 2020 The collection is called POP: Playful on Paradise ...

Furniture Designer – MMS Global – Dubai

Furniture Designer - Dubai - Indeed.ae"),r.close()),!r)throw Error("base not supported");var a=r.createElement("base");a.href=n,r.getElementsByTagName("head").appendChild(a);var i=r.createElement("a");return i.href=t,i.href}finally{e&&e.parentNode.removeChild(e)}}());var l=i(t||""),f=function(){if(!("defineProperties"in Object))return!1;try{var e={};return Object.defineProperties(e,{prop:{get:function(){return!0}}}),e.prop}catch(t){return!1}}(),h=f?this:document.createElement("a"),m=new o(l.search?l.search.substring(1):null);return m._url_object=h,Object.defineProperties(h,{href:{get:function(){return l.href},set:function(e){l.href=e,r(),u()},enumerable:!0,configurable:!0},origin:{get:function(){return"origin"in l?l.origin:this.protocol+"//"+this.host},enumerable:!0,configurable:!0},protocol:{get:function(){return l.protocol},set:function(e){l.protocol=e},enumerable:!0,configurable:!0},username:{get:function(){return l.username},set:function(e){l.username=e},enumerable:!0,configurable:!0},password:{get:function(){return l.password},set:function(e){l.password=e},enumerable:!0,configurable:!0},host:{get:function(){var e={"http:":/:80$/,"https:":/:443$/,"ftp:":/:21$/};return...

The Spa at Mandarin Oriental Jumeira, Dubai reopens this week

From July 9, The Spa at Mandarin Oriental Jumeira, Dubai will be welcoming guests back into a haven of pampering and wellbeing.   ...

Stay in touch

To be updated with all the latest news, offers and special announcements.

%d bloggers like this: