With the diamond industry close to extinction, what’s next for Botswana?

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At independence, the outlook for Botswana was dismal compared to that of other African countries.  

In East and West Africa, rich arable soils were expected to boost agriculture and propel development in the new states. However, there was not much optimism about Botswana, the semi arid Southern African country whose desert soils are not favorable for agriculture. Unlike other Southern African states such as Namibia and South Africa, Botswana, in 1966, did not have any known mineral wealth.

Fast forward to 2016 and Botswana is one of the fastest growing economies in the world. The country has a per capita income of over 18,000 USD a year.  This is a dozen times more than that of most African countries including Uganda and Democratic Republic of Congo; and even countries that are considered icons of African development- for instance Ethiopia, Kenya and Nigeria. In spite of chronic problems such as unemployment the people of Botswana enjoy a standard of living comparable to western states such as Mexico and Turkey. Botswana’s shine does not end there, the country, unlike most African states, has enjoyed democracy and changes in government since independence and is ranked the least corrupt in Africa.

Diamonds, contributing 40% of Botswana’s revenue, are responsible for this glowing development. De Beers, the biggest mining company in Botswana discovered diamonds a year after independence, just when they were at the brink of giving up their search.  De Beers entered into an arrangement with the government of Botswana and the formed Debswana, with the government and De Beers each holding 50% shares in the diamonds mining company.

Critics argue that both the commitment of De Beers to development and not just resource exploitation and the existence of a strong governance system and fiscal policy in Botswana were responsible for the country’s success. A strong political system and the De Beers culture of corporate responsibility, they argue, are what has enabled the country escape the notorious resource curse that has pledged other resource rich countries in Africa.

Now, however, it is becoming more apparent that the stability created by diamonds will not last forever, with experts predicting that the resource may last no more than 20 years. Faced with this reality, the Botswana government is looking for ways to maintain the same pace of development that they have had since independence without the revenue from diamonds.

The Botswana Democratic Party, in power since independence, recognises that, the ability for President Ian Khama to diversify the economy, will be a major determining factor of whether or not the party retains the presidency come the 2021 elections. The younger generation, perhaps taking the country’s successes for granted, yearns for more than just songs of past glory and development. They are more concerned about what the future holds for them. Also, with the entrance of Chinese players in the relatively liberal Botswana economy, a feeling of foreboding hangs over the future of Botswana.

They come in and we do not feel like they are controlled or regulated. They do not serve our interests, says Baboki Kayawe, a journalist who has written about the influence of China on Botswana’s economy.

The worry is that when the shimmer of diamonds dies out, so will the economy – a worry that the Botswana government, while acknowledging, is quick to assuage. The government points out that Botswana does have other development options besides diamonds. Botswana has a robust tourism sector, contributing about 12% of the total GDP. It has great scenery for safaris, a unique eco system and is home to the largest concentration of elephants in the world.

Other flourishing sectors are industry, trade and agriculture. Botswana has promoted trade by creating a transparent and accountable system that makes it easy for both local and international investors to run their businesses. The agricultural sector contributes only 2% of the country’s GDP even though it was the major activity even prior to independence. The major agricultural activity is livestock farming that enables the country export some beef products. However, livestock farming has contributed to soil erosion and loss of soil fertility and is increasingly becoming a non-viable economic activity.

Thus far, to the onlooker, the challenges of moving from diamonds to another economic activity seem insurmountable. But Botswana believes that while diamonds may not last forever, the experience of being one of the largest producers of diamonds in the world will. For diamond production meant the raising of entire generations of skilled men and women, the creation of an economy- hotels, roads, hospitals, housing- that would support an industry so crucial. This cannot be eroded. Indeed, Botswana’s literacy rate towers prestigiously at 90% and this human capital, according to Onkokame Kitso Mokaila, the minister of minerals, energy and water resources, is what Botswana counting on for sustenance.

Photo: Busiku Mainga at the Southern Africa Conference. 

Patience Akumu is a feature writer for the Kampala Observer in Uganda.

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