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Economist: fall in diamond revenues will delay sector reform

The consultancy Economist Intelligence Unit (EIU) warned that the drop in revenues and delays in the reform of the diamond sector in Angola make this industry less attractive, despite predicting reforms in the medium term.


"Shorter revenues and delays in the reform process, as revenues diminish the Government's ability to launch these policies, will make the sector more attractive," write the experts in the analysis unit of the British magazine The Economist.

In a note on the diamond sector in Angola, sent to investors and to which Lusa had access, Economist analysts recall that in April the Government postponed the process of hiring external diamond appraisers, but underline that they hope that the process "completed in the medium term".

The Government, they say, has not yet revised the production estimate of 14 million carats by 2022, which should guarantee revenue of US $ 1.5 billion, but "this growth may be optimistic, since it would imply a significant increase investment flows, which is unlikely not only due to low revenues in the sector, but also due to the challenges that exist in the business environment ".

On May 19, the executive director of the Angolan National Diamond Company (Endiama), revised the production forecast down from 8 million to less than 2 million carats this year.

"The drop in production is caused by the decline in demand for luxury goods due to the pandemic of the new coronavirus, this new and significantly lower target would put revenues at around US $ 200 million, compared to 1.3 billion of dollars received by Angola in 2019 for the sale of 9.2 million carats ", analyzes the EIU.

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