CHAMWE KAIRA
Debmarine Namibia, the country’s largest taxpayer, faced a difficult year in 2024 due to falling international diamond prices and weak economic conditions in major markets such as the US, China, and India.
The market instability forced the company to reduce its diamond production and shorten its market forecast window from two years to just two months.
Debmarine presented the global outlook and its impact on natural diamond demand to stakeholders in Windhoek recently.
Chief executive officer Willy Mertens said the global growth outlook remains stable but noted that US tariffs continue to create uncertainty.
He said there was a slight improvement in growth forecasts following Donald Trump’s election win.
“There is uncertainty relating to US trade tariffs weighing on the economic outlook,” said Mertens.
According to him, the US economy is performing well, but tariffs are a risk to 2025 growth.
Mertens disclosed that US growth was stable and the holiday season was reasonable and that there was record Valentine’s Day jewellery spending expected.
Mertens noted that there is steady real income growth and a resilient labour market with a low risk of recession. But he noted that tariffs pose a risk to 2025 growth.
He went on to say that the outlook for China remains weak for the near and medium term and added that there is a high downside risk stemming from US tariffs.
Mertens added that consumer confidence remains low, despite stimulus, and said no near- or medium-term consumer demand recovery is expected. He disclosed that the Indian economy is expected to see growth pick up in 2025.
The Indian economy saw a slowdown in the second half of 2024, but growth is expected to pick up in 2025.
When it comes to China, Mertens says destocking resulted in growing inventories and low demand. He said lower rough supply has supported midstream to reduce inventory levels in absolute terms.
“Despite a positive holiday season, retailers are reportedly delaying restocking, slowing the normalisation of midstream inventory levels,” Mertens said.
Regarding the impact of Russia (Alrosa) and Sodiam (Angola), Mertens said Alrosa saw a 10% price reduction in December 2024. Sodiam saw price reductions of 30% to 55%.
Debmarine Namibia remains the single largest contributor to government revenue (excluding SACU receipts). Debmarine has contributed N$15 billion to Namibia from the period 2020 to 2024.
The impact of challenging market conditions on earnings before interest, tax, depreciation, and amortisation (EBITDA) over the past two years has cost Debmarine N$7.1 billion.
In 2022, the company paid N$5.9 billion in taxes and royalties, while in 2023, N$6.2 billion was paid, and in 2024, N$1.5 billion was paid.
