By Alessandra Galloni
DAVOS, Switzerland (Reuters) -Top diamond producer Botswana’s new President Duma Boko said on Thursday that he hoped to clinch a long-delayed sales pact with industry giant De Beers as early as Friday but underlined the need to diversify the Southern African nation’s economy.
Boko, a 55-year-old lawyer, took the reins of Botswana – one of Africa’s richest countries – in November following a landslide election upset that ended nearly six decades of rule by the Botswana Democratic Party (BDP).
He has made the task of finalising the deal with Anglo American’s De Beers unit an early priority.
Speaking at a Reuters NEXT Newsmaker at the World Economic Forum’s annual meeting in Davos, Switzerland, Boko said his government was in agreement with De Beers on most issues. All that remained was “tidying up”, he added.
Asked by Reuters Editor-in-Chief Alessandra Galloni when the deal would be signed, Boko said: “I’m hoping it is tomorrow. I mean it literally.”
Botswana and De Beers agreed a new pact in 2023, which would see the government’s share of diamonds from the Debswana joint venture gradually increase to 50% over the next decade. But it was never signed under Boko’s predecessor Mokgweetsi Masisi.
Debswana currently sells 75% of its output to De Beers.
In addition, Boko said talks aimed at increasing Botswana’s ownership stake in De Beers – currently at 15% – were “going well”.
Anglo American is looking to divest De Beers as part of a broader restructuring of its sprawling business.
CHALLENGES AND OPPORTUNITIES
Like many African countries, Botswana’s economy is largely dependent on the export of a single commodity – in its case, diamonds, of which it is the world’s leading producer by value.
Unlike many of its continental neighbours, its leaders have invested their commodity windfall in health, education and social welfare.
The strategy has largely paid off. Botswana’s GDP per capita was $7,250 in 2023 – compared with an average for sub-Saharan Africa of $4,800, World Bank data shows.
Analysts, however, blamed mounting economic grievances, particularly among young people, for the downfall of the BDP, which had governed the nation of around 2.5 million people since independence from Britain in 1966.
“The so-called liberation parties did the best they could,” Boko said. “It seems to me that many of them have now outlived their welcome and their usefulness.”
On the campaign trail, Boko’s coalition pledged to more than double the minimum wage, improve social services and create a more independent judiciary, among other measures.
But the new president faces headwinds.
The economy likely contracted last year on a downturn in the global diamond market and unemployment has been on the rise.
The finance ministry is now forecasting a diamond rebound and GDP growth of 3% to 4% this year. However, Boko told the Reuters event that Botswana could not rely solely on diamonds.
“We are looking to power the economy of Botswana. We’re looking to diversify it,” he said, adding that his government would focus on the green economy, climate-smart agriculture, renewable energy and diversifying the mining sector.
While many world leaders are viewing the return to power of U.S. President Donald Trump with concern, Boko said the new Washington administration’s vow to bring its foreign policy in line with American self-interest was not necessarily a threat.
“(The) West has every reason to play its part in Africa, because if it doesn’t, there are others who will want to play some part. We have China in the wings, and it’s seeking… to exert influence on Africa,” he said.
(Additional reporting by Bhargav Acharya and Sfundo Parakozov in Johannesburg; Writing by Tannur Anders and Joe Bavier Editing by Alexander Winning, William Maclean)
