Botswana’s Success Story
With a population of just over two million people spread across a landmass comparable in area to that of Texas, Botswana historically was rural, tribal and agriculture-based. That is, until the discovery of diamonds in 1967 turned the country into a poster child for the benefits of a well-functioning African democracy and an economic success story.
Observers credit the effective relationship between government and the country’s private sector along with the investor-friendly attitude adopted by state officials for the progress in Botswana. Given the country’s heavy dependence on the diamond industry, nothing has been as important to its development as the government’s partnership with De Beers, a partnership that marks its 40-year anniversary in 2010.
While the government owns a 15 percent stake in De Beers and the two entities have equal shares in the Debswana mining company and the Diamond Trading Company Botswana (DTCB), it is estimated that, after accounting for royalties, taxes, duties and dividends, 80 cents of every dollar of revenue generated by De Beers goes to the government.
Undoubtedly, 2010 will see new milestones for that relationship as the economy claws its way out of the global recession and Botswana aggressively embarks on a program to diversify away from diamonds. Much of the second half of the year will be spent negotiating a new marketing contract for Debswana goods, as the current contract expires at the end of 2010. It is hoped this contract will pave the way to finally introduce diamond trading in Gaborone.
Overseeing many of these developments, Minister of Minerals, Energy and Water Resources (MMEWR) P.H.K. Kedikilwe is acutely aware of the fine balance required to trade off what is best for the country, for De Beers and for
but the diamond industry, and he is increasingly sensitive to the changes that lie ahead.
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