A New Dawn for the Botswana Diamond Industry
The country is at a pivotal point in its diamond journey, with the new deal between De Beers and the government seen as a catalyst for growth.
December 21, 2023 | Avi Krawitz
"Botswana President Mokgweetsi Masisi paused for a moment after stepping up to the podium to address the annual Natural Diamond Summit in Gaborone.
As he looked through the marquee venue, aptly known as the Diamond Dome, with its intentionally earthy décor, Masisi appeared measured. The speech he was about to give was his first major address to a broader De Beers-organized audience since the government announced its landmark deal with the company on June 30.
His words would highlight the government’s unique partnership with De Beers, after the prolonged negotiations tested the relationship. Masisi would demonstrate confidence in the natural-diamond industry, which has endured a difficult year in 2023 but remains vital to Botswana’s economic development. And that would tie into the Botswana-De Beers narrative that a focus on sustainability would drive growth — relating to how the country and the industry connect “people, planet and product,” the theme of the summit.
“We’ve already made strides in the direction of sustainable partnerships and collaborations where industry players, government and communities are working together to unlock the full potential of our precious resource,” Masisi said. De Beers CEO Al Cook conveyed a similar message at the summit, which took place from November 13 to 14.
Economic reliance
Botswana still depends on diamonds for economic growth, despite efforts to diversify the economy away from mining.
The economy is expected to grow only 3.8% in 2023, compared to 5.8% in 2022, due to weak demand for rough diamonds, Masisi said in his State of the Nation Address on November 6. That rate signals a normalization of the economy after the ups and downs of the pandemic period, notes local economist Keith Jefferis, managing director at eConsult Botswana.
Commodities from the mineral sector, particularly diamonds, copper-nickel, and silver, accounted for 92% of total exports, Masisi added. Diamond mining accounted for approximately 20% of gross domestic product (GDP) in 2022, while diamond cutting, polishing, and trading made up about 5%, reports Jefferis.
While that reliance on diamonds is a concern for the country, the government’s successful allocation of its revenues has made Botswana an example of the positive impact diamonds can have on society.
“We’ve been able to transform our economy and by extension support livelihoods predominantly through the discovery of diamonds, but more importantly the prudent management of these shining and rare valuable stones,” Masisi told the summit.
In 2011, the government established a fiscal rule whereby 40% of mineral revenue would be saved in the form of financial assets for future generations, while the rest would be invested ... "
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