Botswana’s Diamond Obsession: A Shiny Distraction
- Avi Krawitz
- 1 day ago
- 5 min read
Editorial
The central challenge facing Botswana under newly elected President Duma Boko is to reduce the nation’s long-standing reliance on diamonds. At the same time, Boko appears to be angling for greater control over the country’s diamond wealth and perhaps a more decisive voice in the impending sale of Anglo American’s majority stake in De Beers.
Diamonds have underpinned Botswana’s economic rise since their discovery in 1967, just one year after independence from Britain. The government’s partnership with De Beers, now in its sixth decade, is often cited as a benchmark for private-public cooperation.
At the very least, it has been mutually beneficial. De Beers gained access to one of the world’s richest diamond resources; the Botswana government, in turn, benefited from the company’s technical expertise, global marketing reach, and established distribution networks.
The arrangement is structured through a complex web of joint ventures. The two sides share 50-50 ownership of Debswana, which oversees mining operations in the country, and DTC Botswana, responsible for sorting and valuing Debswana’s production. Additionally, the government holds a 15% stake in De Beers itself, with the remaining 85% owned by Anglo American.
Yet the relationship has not always been smooth. The recent negotiations over a 25-year extension of Debswana’s mining license and a 10-year renewal of the sales agreement for its rough diamonds were tense, with former President Mokgweetsi Masisi taking a notably hands-on role. At stake was not just contractual language, but the broader trajectory of Botswana’s diamond sector.
The government’s goal was clear: secure a larger share of Debswana’s production for independent sales through the state-owned Okavango Diamond Company (ODC), spur more downstream processing within the country, and leverage Botswana’s brand in global diamond marketing.
Those talks dragged on well beyond their 2020 deadline before the new agreements were signed earlier this year — barely three months after Boko unseated the once-confident Masisi, ending the uninterrupted reign of the Botswana Democratic Party since independence. The deal was widely seen as another political win for Boko and an early signal that he intends to govern with momentum.
The outcome largely aligned with the government’s aims. ODC will sell 30% of Debswana’s production in the first five years, 40% in the following five, and 50% thereafter. The agreements include commitments to enhance beneficiation and co-branded marketing — and, importantly, the creation of a Diamonds for Development Fund to support economic growth, diversification, and job creation. That fund will be largely financed by De Beers.
It seemed, for a moment, that the old tensions had been resolved.
That’s what made President Boko’s recent comments lamenting De Beers’ control of Botswana’s diamonds so surprising (see video here).
Speaking to a group of expat Batswana in Lesotho last week, President Boko outlined what he called two “fatal errors” in Botswana’s management of its diamond resource. The first, he argued, was that the country should have taken full control of its diamonds when they were first discovered — or at the very least, he said, “the baseline for negotiations should have been 50%.”
The second came in 2011, when the government declined its right of first refusal to buy the Oppenheimer family’s 40% share in De Beers. Instead, Anglo American acquired them, giving it an 85% stake and leaving the government with 15%. “We were now a minority shareholder in our diamonds,” Boko said. “Now the selling of these diamonds is done by this company with very little involvement by ourselves.”
He also criticized the previous administration for its failure to diversify the economy. As a result, he said, when the diamond market slumped — as it has in the past year — “our economy almost collapsed, which was also reasonably foreseeable. The country is broke and has cash flow problems as a result of all these.”
That is not hyperbole, nor simply a case of shifting blame. According to the World Bank, the economy contracted by about 3% in 2024, as diamond production fell 24% and revenues declined by more than 50%. Yet diamonds still accounted for over 80% of Botswana’s exports.
Boko is understandably shellshocked. “You realize the gravity of the situation,” he said of taking office under such circumstances.
But taking a larger stake in De Beers is not the answer — nor is reopening the question of who owns Botswana’s diamonds. It is far from clear that the country would have developed the way it did without the original deal struck with De Beers in the late 1960s. Even today, an estimated 80 cents of every dollar generated by De Beers in Botswana flows back to the government.
It is also worth acknowledging the foresight of the country’s early leaders in how they managed those revenues, not just by investing in infrastructure and providing free health care and education, but by shaping a sound economic environment. Their commitment to a stable, low tax regime helped attract foreign capital and build the fiscal base that Botswana still relies on.
That’s where the new president’s focus should be. To revive the economy, Boko should be signaling to potential investors — starting with those interested in acquiring Anglo’s stake in De Beers — that his government will be a steady, supportive partner. That message, in turn, would help position Botswana as a welcoming destination for investment in other sectors like agriculture, tourism, and knowledge industries that his predecessor had aimed to promote.
The government should not pursue majority ownership in De Beers. At most, it might consider raising its stake to 25%. Even that would strain public finances at a precarious time, not to mention the capital required to support De Beers' operations not just in Botswana, but also in Canada, Namibia, and South Africa. Given the country's current economic situation, the optics of such a move would be poor.
Boko’s comments underscore a real issue: Botswana is too dependent on diamonds. But they also reflect a deeper problem — the government remains too fixated on the industry. This was evident again in his appearance at the JCK Las Vegas jewelry show, marking the third straight year a sitting president has attended.
Frankly, it’s a forum beneath the office of the president. While other nations are making their case in Washington over US tariffs, Botswana faces a 37% duty on its exports to the world’s largest diamond market. Boko’s time would have been better spent in the US capital. Although he reportedly met with Secretary of State Marco Rubio during the trip, the meeting drew little public attention. The spotlight instead went to the launch of the House of Botswana branding initiative and the scripted interviews and speeches delivered to the industry — none of which required his personal presence. Once again, the optics were poor.
The reality is that the potential for diamonds to lift Botswana’s economy is limited, even if the market rebounds. Further investment in beneficiation won’t change that. The country’s diamond manufacturing sector is already saturated, and sightholders are, if anything, scaling back their operations.
Of course, Botswana must continue to leverage its production and its “diamonds-do-good” narrative. The goal should be to extract maximum value from existing structures. In that context, we expect — and hope — that ODC will grow into a profitable and more influential force in the global industry.
Still, a diamond-led rebound would merely paper over the cracks. What Botswana needs from its leaders is not more attention on diamonds, but bold efforts to cultivate entirely new sources of revenue. That begins with sending a clear signal to international investors: Botswana is open for business. It’s a message former President Masisi failed to deliver, tying his legacy too tightly to diamonds.
And it seems President Boko has yet to learn that lesson. He faced a task of historic proportions: to guide Botswana toward a more diversified and resilient future — one no longer built on a single, shiny resource. His comments last week did little to advance that goal.
