Botswana is a southern African country whose history is closely linked to De Beers, the diamond firm founded in South Africa by Cecil Rhodes. It gained independence from Britain in 1966. A year later geologists discovered the first of several big diamond deposits. In 1969 the country set up Debswana, a joint mining venture with De Beers.
From 1970 to 2000 Botswana's economy grew by an average of 10.6% per year, a slightly higher rate than China's 9% average for the period. Governments prudently managed the windfall, investing in infrastructure, schools and clinics, and putting budget surpluses into rainy-day funds like the Government Investment Account. Botswana was historically Africa's largest producer of diamonds by value.
Diamonds account for about 25% of GDP and 80% of exports. The slump in natural diamonds—driven by cheap lab-grown alternatives and, to a lesser extent, fewer marriages in America and China—has in effect halted growth since 2023. As revenue has fallen, Botswana has emptied the rainy-day fund. The ratio of debt to GDP has almost doubled since 2023; two credit-rating agencies downgraded the country's sovereign bonds. The budget deficit for the fiscal year beginning in April 2026 is forecast to be almost 9% of GDP.
In 2024 Angola displaced Botswana as the largest diamond producer by value in Africa for the first time in 20 years.
Botswana holds a 15% stake in De Beers and accounts for 72% of the firm's production. With De Beers's parent company, Anglo American, preparing to sell the firm, Botswana is seeking a stake of at least 25%, which would give it a "blocking minority" to veto major decisions. The IMF has warned against the country increasing its stake, citing its fiscal situation. Sceptics note Botswana has struggled to rival India in the cutting and polishing of stones—a low-margin business—and argue the country is a "classic case of Dutch disease" that should diversify away from diamonds. The most likely scenario is that De Beers is bought by a broad consortium involving private investors and African governments. Bogolo Kenewendo is Botswana's minerals minister; Duma Boko is the president.
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