Africa-Press – Botswana. A highly regarded western think tank has confirmed what has always been common knowledge among those with a clear understanding of the business relationship between the Botswana government and De Beers – and what evidently motivated President Mokgweetsi Masisi to drive a hard bargain when these business partners re-negotiated their diamond sales agreement.
“With tens of billions of dollars already invested in Botswana and immense dependence on the nation’s mines, it is extremely unlikely De Beers will pull out of the nation in the coming decades,” says the 2023 edition of the Economic Freedom of the World Report which is published by a Canadian think tank called Fraser Institute. “Indeed, in July 2023, De Beers and the government of Botswana agreed that, among other things, the company would invest as much as $825 million in the nation over the next 10 years.”
De Beers discovered large diamond reserves in 1967, a year after independence, and the following year, established a joint company, Debswana, with the Botswana government. The Orapa mine became operational in 1971 and the Jwaneng diamond mine opened in 1982. Some 41 years later, the latter remains the richest diamond mine in the world by value. Botswana itself remains one of the leading diamond exporters globally and possesses approximately 20 percent of the global supply.
At the time that this partnership came into being, Botswana was one the three poorest countries in the world and as the payer of the piper, De Beers got to call the tune. In a period of time that Botswana didn’t even have its own currency, the company funded the Orapa mine to the tune of R26 million (P360 million today), which was equal to one-third of Botswana’s GDP. This enabled De Beers to allocate Botswana only 15 percent of profits from diamond sales.
Last year, as the negotiations got underway and an emboldened Botswana asked for more, some people got very jittery and warned that the country was riding for a fall. Among them were two high-profile Khamas: former president Ian Khama and former De Beers Botswana CEO, Sheila Khama. The other was the president of the Alliance for Progressives, Ndaba Gaolathe. Masisi warned that if De Beers couldn’t make a more generous offer, then Botswana was willing to walk out on the decades-old partnership. On the other hand, Gaolathe warned that that would be a grave mistake. This jitteriness by these and many more people who supposedly have sophisticated understanding of business and governance had the effect of making ordinary Batswana nervous about the possibility of a future without De Beers.
On the other hand, there remained very strong sentiment, championed by Masisi, that De Beers needs Botswana more than Botswana needs it. Deploying the present continuous tense for literary effect, Press has summarised that sentiment in an anecdote about what Debswana’s former Managing Director, Louis Nchindo, reportedly said at a group managers’ retreat: “The topic of discussion is ‘How De Beers made Botswana.’ De Beers’ managers are smacking their lips and thumbing their breasts with pride. The late Debswana Managing Director, a champion of Botswana’s citizen economic empowerment who never toned down his act to accommodate his foreign counterparts reputedly said, ‘No, the topic of discussion should be: How Botswana made De Beers.’”
A month after the Botswana-De Beers was sealed, Mmegi reported that Debswana had engaged a South Africa digital forensic company to investigate whether some managers may have leaked highly confidential information that strengthened Botswana’s hand during the negotiations. Such intrigue aside, the government would also have benefitted legitimately from the knowledge of people who have worked for decades in the diamond industry, including at Debswana itself.
One is Boyce Sebetela, the Chief of Staff in the Office of the President who joined the government from Debswana where he was Group Manager – Strategy and Business Improvement. The other is Mmetla Masire, the Managing Director of the Okavango Diamond Company who was Debswana’s Group Engineering Manager and has served in the boards of De Beers, Debswana, Diamond Trading Company Botswana and Minerals Development Company Botswana. It is unclear what role the ruling party played in the negotiations but its secretary general, Kavis Kario, has worked as a General Manager at Gem Diamonds Botswana.
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