Analyzing politics in real-time often reveals just the surface of deeper complexities. However, the recent election of Duma Boko as Botswana's president appears to offer promising prospects for the diamond industry. The relationship between the previous administration and De Beers seemed strained, with negotiations for a new sales deal stalling repeatedly. Despite reaching an initial agreement on aspects like the distribution of rough diamonds, a final contract remains unsigned.
A Fresh Start in Leadership and Diplomacy
President Boko’s Umbrella for Democratic Change (UDC) emerged victorious against the long-ruling Botswana Democratic Party (BDP), which had been in power since independence in 1966. In his first address, Boko struck a conciliatory tone, emphasizing a willingness to re-engage with partners and finalize the diamond contract.
“We need to urgently engage our partners to ensure the agreement is signed. The alternative, where they could walk away, puts us in a very risky position, especially given the current economic challenges,” Boko commented.
He acknowledged the strain in the relationship with De Beers and its parent company, Anglo American, potentially due to the approach of the former administration. His message was clear—he intends to understand the grievances of these key partners and restore the collaboration that is vital to Botswana’s economic well-being.
Industry Reacts to the Change
While De Beers has presented a neutral public stance on the election, the diamond community speculates that the new leadership is a positive development. Many industry stakeholders had been unsettled by the previous administration's efforts to assert greater control over Botswana's diamond output—a move that decreased confidence in the industry’s biggest diamond miner during Anglo American’s rumored attempts to sell De Beers.
An Indian diamond executive stated, “De Beers is one of the cornerstones of this business. They know how to build a brand and create a premium product. Losing them would be a major setback for the industry.”
Challenges Ahead—The Cost of Reform
Boko’s agenda includes raising the minimum wage in Botswana from roughly BWP 1,500 (about $110) to BWP 4,000 (around $300) per month. This move, while supportive of worker welfare, could place added pressure on the nation’s diamond polishing sector, which already faces high costs and limited skills. Wages currently range from $150 per month for entry-level workers to $700 for experienced cutters, and increasing them could further burden already tight margins.
An executive from a major manufacturing company remarked, “This minimum wage hike will complicate efforts to boost beneficiation. It’s going to hit companies’ profits hard.”
Lingering Questions About HB Antwerp
Another key issue is the prospective investment in Belgian diamond manufacturer HB Antwerp, where Botswana had been negotiating to acquire nearly half of the company. The negotiations between Botswana and HB Antwerp were thought by some to be a bargaining chip in the ongoing discussions with De Beers.
HB Antwerp cofounder Rafael Papismedov stated that they are ready to continue discussions with the new government once it is prepared to move forward. “We will re-engage when the time is right, as soon as the new leadership has reviewed the details,” he said.
A Balancing Act for Botswana's Economy
Botswana's economy remains heavily reliant on diamonds, and the new administration has difficult decisions ahead. During a period of declining global demand, diversification remains a challenge. President Boko highlighted the need to secure the diamond sector’s stability while seeking new sources of revenue. "We have to protect the goose that lays our golden egg," he said, underscoring the economic importance of diamonds for the nation.
This changing landscape could mark a turning point for Botswana's diamond industry. The question remains—can renewed diplomatic efforts revitalize trust and cooperation with De Beers, while also navigating the challenges of reform and economic diversification?