Debmarine Namibia Chief Executive Willy Mertens says any tax relief for the diamond sector should be considered on a case-by-case basis as the industry faces declining revenue, changing consumer preferences and mounting pressure to protect jobs.
Mertens said tax breaks could help companies sustain investment and employment but warned that the government also needed revenue to finance public services and social programmes.
“A tax break could allow businesses to invest more and preserve employment. However, the government also needs revenue to fund roads, hospitals, schools and social grants. It is a balancing act,” he said.
Mertens said a blanket reduction or removal of taxes would not be appropriate, arguing that any relief should reflect the circumstances and challenges facing individual businesses.
His remarks come as the diamond industry continues to face difficult trading conditions, although Mertens said the market had stabilised, with production and prices no longer experiencing sustained declines.
He said the stabilisation could provide a basis for a recovery in diamond demand, although the timing and extent of such an improvement remained uncertain.
The downturn has forced Debmarine Namibia to reduce costs and adjust its operations to align production with market demand. The company reduced its workforce by approximately 17% in 2025 and cut its cost base by about 20% over the past three years.
Mertens said protecting cash flow and maintaining financial sustainability were necessary to keep the business operational until market conditions improved.
“Our first priority is to protect the business and preserve cash. We have come to understand that cash is critical, alongside the people and skills required to sustain operations,” he said.
The company also faces competing demands from shareholders, lenders, employees and communities. These include maintaining assets, investing in skills, supporting local beneficiation and continuing social investment while ensuring that the business meets its financial obligations.
Mertens said the industry had previously expected diamond demand to recover following the COVID-19 lockdowns, partly on the assumption that the resumption of social activities would support natural diamond purchases. However, consumer behaviour did not develop as anticipated.
Some consumers have opted for laboratory-grown diamonds and redirected the money saved towards other purchases, including holidays. This shift has added to uncertainty surrounding the recovery of natural diamond demand.
The outlook also depends on whether the downturn is cyclical or reflects longer-term structural changes in the market. Mertens said businesses needed to plan for prolonged uncertainty rather than rely exclusively on forecasts of a recovery.
Debmarine Namibia has continued investing in local skills despite the downturn. The company began seabed diamond recovery operations in 2001, when Namibians accounted for approximately 11% of its workforce. That share increased to 80% within five years.
The company spends close to N$130 million annually on skills development, having maintained investment through periods of economic pressure, including the downturn in 2015 and the COVID-19 pandemic in 2020.
Mertens said businesses needed to develop local expertise deliberately rather than depend primarily on imported skills.
He also identified market access and the ability to secure demand for products as constraints on business growth, noting that access to finance alone did not guarantee commercial success.
