The foundation stone of our prosperity

Diamonds have been the engine for Botswana’s economic development, catapulting the country from one of the poorest in the world in 1966 to middle income status by the 1990s with per capita income of about US$6,500. Diamonds dominate Botswana’s economy, contributing about 50 per cent of government revenues, over 70 per cent of export earnings and about a third of the gross domestic product. Botswana is now the world’s largest diamond producer by value.  Thanks to the government’s prudent management of revenues accruing from its 50/50 partnership with De Beers, Botswana has been — and continues to be — the best-performing economy in Africa with average economic growth rates among the highest in the world, especially among the non-oil producing countries.  

Mineral revenues have been invested in a wide variety of social and economic infrastructure (education, health, roads, water etc).  As a result of this investment, Botswana boasts a literacy of over 80 per cent. Until it was hit by the HIV/AIDS scourge in the 1990s, it had one of the highest life expectancies in Africa. Although HIV/AIDS has reversed some of the country’s development achievements, the availability of diamond revenues enabled the country to mitigate the impacts of HIV/AIDS by providing free medication to all those in need.

While diamonds remain, and promise to remain, the cornerstone of Botswana’s economy, their dominance of the economy has had the negative impact of developing a strong local currency which has stifled development of the manufacturing sector and diversification of the economy. Botswana’s economy thus remains fragile and susceptible to fluctuations in diamond prices. It is for this reason, among others, that the success of the Kimberley Process and the protection of the legitimate trade in rough diamonds are so vital.

When Botswana started diamond mining in the late 1960s, one of the first pieces of mineral legislation to be enacted was the Precious and Semi-Precious Stones Protection Act. This act, passed in 1969, prohibited unauthorised dealings in diamonds; control of Botswana’s diamonds through licensing of both mining and possession has been in place ever since.

In Botswana, the advent of the KP has therefore been an add-on to an existing regime; its integration has been seamless and has so far not caused any additional burden on the country’s diamond industry.

Botswana fully embraces the KP and has actively participated by inviting a peer review visit in 2004, taking part in review visits to five participating countries and chairing the Kimberley Process during 2006. This shows the importance the government attaches to the Kimberley Process and its role in protecting the image of Botswana diamonds.

Ajay Garg works at the Ministry of Minerals, Energy and Water Resources in Gaborone, Botswana.