Are Botswana's Diamonds Losing Sparkle?

Botswana is being forced to look at diversifying its economy following predictions that the diamond industry will dry up in 20 years' time.

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Photo: WDC

Loose round brilliant diamonds.



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  • Southern Cross - Financial Advice for Africa
    Nov 10 2012, 01:43

    Hazem Beblawi suggested four characteristics that would determine whether or not a state could be identified as rentier:

    1) if rent situations predominate 2) if the economy relies on a substantial external rent – and therefore does not require a strong domestic productive sector 3) if only a small proportion of the working population is actually involved in the generation of the rent and, perhaps most importantly, 4) which the state’s government is the principal recipient of the external rent

    I fail to see that Botswana is a very different example - there has been very little diversification of the economy since diamonds were found, and the vast majority of the Botswana's GDP is diamond based.

  • The JO
    Feb 4 2013, 16:48

    Yep. The Botswana economy is not diversified true. It owes to a number of reasons. 1) dependency syndrome. Despite the effort by government to diversify the economy by giving grants for individuals to start enterprises, they cannot seize that opportunity they would rather remain dependent on Government such that they don't see any need to produce for themselves. That is not also not helped by the political leadership that tend to buy loyalty by way of giving handouts. 2) Lack of Agency. It's business as usual in Botswana. Most of offices are characterised by statements such 'come next week', we can't get your file at the moment', 'the boss is attending a conference and as such your documents will be ready after a month,' 'keep on checking maybe you will find help,' we will send your request to Gaborone check us in a months time. Etc. certainly one can read a lot of hiccups from all these. Bureaucracy and other complications result in people giving up on their projects so easily. To be specific it takes more than a month to have water connected to your home in town and more than three months for electricity to be connected. In rural areas its even worse and these are places where businesses can develop due to availability of land. 3) information flow. A lot of people still don't know where to go if they need information about certain things due to scanty information sources. 4) Livestock Industry. This is an area than could have been more profitable than diamonds but the confusion that is found in this industry leaves a lot to be desired. Eg foot and Mouth. There is a lot of unreliable info in relation to this disease. Most of info is based on speculations and hasty decisions, one part of the country livestock is killed because of the disease and in other areas nothing happens. The next morning the same infected cattle are exported to other countries. You are told small stock is not affected by FMD after ten months everything changes. All these are not helping those who wish to diversify the economy.