New Era for Nation Built on Diamonds

Botswana is a nation built on diamonds.

On 30 September 1966 the United Kingdom granted independence to what was then known as the Bechuanaland Protectorate, one of the world's poorest populations.

Barely five months later, on 1 March 1967, diamonds were found at Orapa, in north-central Botswana.

That discovery changed everything. Diamond revenue paid for roads, electricity grids, water supply systems, schools, universities, hospitals, social welfare, and much more. A nation of largely poor farmers was transformed into one of the most advanced African nations, and the world's biggest diamond producer by value.

With diamonds playing such a critical role in Botswana's economy, the sale of De Beers deserves close scrutiny. Since the departure of Nicky Oppenheimer in 2012 as chairman, De Beers has been overseen by board members at Anglo American whose primary responsibility was to maximize returns for Anglo American's shareholders.

Anglo American's leadership has been dominated by mining engineers and geologists. Their expertise lay in extracting diamonds from kimberlite, operating massive mining trucks, and optimizing mining operations. What was largely missing, however, was deep expertise in the luxury retail sector and consumer marketing, the very disciplines that transformed diamonds into one of the world's most desirable luxury products.

Botswana has amassed a stockpile weighing almost two and a half tonnes (that's 12m carats) of rough that it can't shift (according to its finance ministry's figure, December 2025). In the past month, Angola has finally started to reduce the sale of smaller goods, in other words, it is also stockpiling. With the Russians acting rationally as well, at last, in the past month, rough prices have increased across all ranges and qualities.

Botswana's revenue from diamond sales, has seen a slump by 59% from $4.59 billion in 2022 (boosted by stay-at-home Covid customers) to just $1.86 billion in 2025.

That is having a grave impact on the government's own coffers, down from $2.73 billion in diamond tax revenue for the 12 months to March 2023 to just $0.64 billion in the 12 months to March 2025.

 Actual and, for 2026, projected real GDP growth for Botswana, according to World Bank estimates.

Before diamonds were discovered, almost half of Botswana's adult males worked abroad because there were so few job opportunities.

Diamonds lifted the country out of poverty and gave it a stable economy. But it became too reliant on them, to the point that they accounted for around 80% of all exports, a third of fiscal revenues, and a quarter of the country's GDP.

Its public finances and employment market are heavily concentrated in natural diamond production, which is fine when demand is high. But terrible when it's in freefall, as it is now.

In March of this year the ratings agency S&P Global downgraded Botswana's credit for the second time in six months, down to BBB-.

"The downgrade reflects our view that global diamond demand will likely remain weak for longer, weighing on Botswana's already-strained economy and public finances," it said, although the groups bidding to buy De Beers, and to invest over $1 billion in natural diamonds, are clearly more optimistic.

President Boko recognizes the urgent need to reduce Botswana's heavy dependence on diamond revenues. Its government must develop new industries, open the state energy market so that private companies can compete, and promote development of agriculture, tourism, non-diamond mining and more.

That's all good and well, but the deeper issue is execution. Botswana's economy has already contracted, debt has risen. Financing the government spending with debt has its limits.

As De Beers' ownership structure undergoes what is likely to be its most significant transformation in decades, Botswana is widely expected to increase its stake in the company. As it is by far the largest contributor to De Beers' diamond reserves, production, and sales, it is only fair that Botswana should receive a substantially larger share of the profits generated by the business, while also strengthening its representation on the company's board.