Botswana: Duma Boko Doubles Down On Diamonds

Despite advice to diversify Botswana’s economy, President Boko has doubled the country’s stake in De Beers.

President Duma Boko’s announcement this week that Botswana would double its stake in the diamond company De Beers – to 30% – was counter-intuitive.

Diamonds have long been the mainstay of Botswana’s economy, historically contributing about 70% or more of its exports, one-third of government revenue and about a quarter of gross domestic product (GDP). The success of the country’s 50-50 partnership with South African diamond giant De Beers in Debswana, in addition to Botswana’s 15% stake in De Beers itself, has underpinned the country’s economic and perhaps political success.

But since late 2023, natural diamonds have been losing their sparkle as global prices have plummeted, mainly due to competition from cheaper lab-grown diamonds and depressed demand from China.

As a result, the Botswana economy contracted by 2.8% in 2024 and by a further 0.7% in 2025. The World Bank said in a July report that the problem had been exacerbated by ‘a prolonged weakening of fiscal discipline, evidenced by repeated fiscal deficits and rising debt’. Debt increased from about 22% of GDP in 2023 to nearly 40% in 2025.

This was compounded by limited progress in diversifying away from its over-dependence on diamonds – a requirement the World Bank said had long been understood, including by the government. The need was now urgent as the country faced ‘an unsustainable debt trajectory’ unless the business environment improved and skills were aligned to market demands.

Instead, Boko this week doubled down on diamonds, announcing that Botswana would increase its stake in De Beers from 15% to 30%, buying the rest from Anglo American, which is disposing of its 85% stake in De Beers. The selling price is not yet known. There is speculation of around US$1 billion, but the market is talking of a ‘fire sale’.

Boko also endorsed the Global Diamond Consortium’s bid to acquire the rest of De Beers. Consortium chair and former De Beers CEO Gareth Penny noted that the consortium and Botswana were collaborating ‘towards becoming co-owners of De Beers.’

Boko said Botswana would become the ‘single largest shareholder’ in De Beers, giving it ‘greater influence in the strategic decisions’ for years to come. This was opening ‘a new chapter in Botswana’s diamond story.’

Penny’s consortium includes some of De Beers’ largest customers as well as the governments of Namibia and Angola – also significant diamond exporters. Oman too, perhaps.

‘For the first time, the great diamond producing nations of our regions will sit together at the ownership table of the company that markets their diamonds,’ News 24 reported Boko as saying. He did not elaborate on the size of the stakes Angola and Namibia would hold.

Boko’s announcement seems to have alarmed most observers. Daily Maverick mining correspondent Ed Stoddard wrote: ‘It’s a gamble with the odds heavily stacked against Botswana’s bet.’

Stoddard noted the slump in the natural diamond market ‘has been relentless, with average uncut gem prices dropping a further 32% in the first six months of 2026. Red lights galore have been flashing, including Anglo’s suspension in July of production at De Beers’ Venetia diamond mine in Limpopo – just after it had invested $2.2-billion to convert it from an open-pit to an underground operation.’

He thought Botswana’s gamble on diamonds was jeopardising its hitherto stellar reputation for economic prudence, noting that Standard & Poor’s (S&P) downgraded Botswana’s rating in March and maintained that view in September.

‘The negative outlook reflects our view that the structural weakness in global diamond demand will continue to constrain Botswana’s economic growth prospects, as well as its export and fiscal receipts, putting pressure on the country’s external and fiscal buffers,” said S&P.

Keith Jefferis, Managing Director of Econsulting and former deputy governor of the Bank of Botswana, told ISS Today: ‘It seems that President Boko and much of the government of Botswana believe that De Beers can be turned around once it is out of Anglo’s hands … That is clearly a risky assumption given the experience of the last few years, and De Beers recent losses.’ Jefferis was referring mainly to the collapse in natural diamond sales.

‘Also, the new owners will be faced with significant additional calls on financial contributions given the investment needs at various mines as well as other potential expenditures on De Beers restructuring, not to mention financing any future losses.

‘But there is confidence that Gareth Penny is the right guy to partner with and that his Global Diamond Consortium brings together all essential stakeholders necessary to run De Beers better than Anglo has.’

Was this reckless resource nationalism? Has Boko been mesmerised by the prospect of Botswana owning all those glittering gems, regardless of their likely depreciating value? Or do he and Penny know something we don’t about where the diamond market is going?

The fact that Swiss luxury group Richemont, owner of Cartier, as well as sightholders Diarough, Pluczenik and Grandview Klein Diamonds are reportedly contemplating joining the Global Diamond Consortium, suggests they have something up their sleeves.

The International Diamond Exchange’s John Jeffay notes that it is indeed a paradox that Botswana aims to double its stake in De Beers even as it also seeks to reduce the dominance of De Beers in its diamond industry.

But it may not necessarily be a contradiction, he adds. He suggests Boko wants greater influence in De Beers to shift more value-addition in diamonds towards Botswana, such as in marketing, jewellery manufacturing and diamond cutting, polishing and grading. And then use much of that extra value to diversify Botswana’s economy away from diamonds.

Similarly, Paul Zimnisky, Head of Paul Zimnisky Diamond Analytics says: ‘I don’t see it as that black and white. Diversifying away from the resource that represents three-quarters of their exports isn’t going to happen overnight. The De Beers sale represents a huge industry catalyst, and I think it makes sense for them to be involved as they still have tremendous skin in the game. They will have to leverage diamonds in the coming decades to diversify the economy longer term.’

So method, it seems, in the madness.

By ISS.