Boko Is Gambling Botswana's Future on a Sinking Diamond Market

Botswana's public debt went from about 22 percent of GDP in 2023 to nearly 40 percent in 2025. Over the same period, the economy shrank by 2.8 percent in 2024 and by a further 0.7 percent in 2025. Those are not abstract figures. They are school fees that cannot be paid, clinics running out of medicine, and young graduates who leave Gaborone for Johannesburg because there is nothing waiting for them at home. And now the President has decided that the answer to a shrinking economy built on diamonds is to buy more diamonds.

Let us be precise about what Duma Boko has announced. Botswana will raise its stake in De Beers from 15 percent to 30 percent by buying the shares that Anglo American is shedding. The price has not been disclosed. Speculation puts it near US$1 billion, and some in the market describe the sale as a fire sale. Boko has also thrown his government's weight behind the Global Diamond Consortium, led by former De Beers chief executive Gareth Penny, which wants to take control of the rest of the company. He says Botswana will become De Beers' single largest shareholder. He calls this a new chapter in the country's diamond story. We should ask the harder question: a chapter written in whose ink, and paid for with whose money?

The market signals are flashing red. Average prices for uncut natural diamonds fell a further 32 percent in the first half of 2026, according to Daily Maverick's mining correspondent Ed Stoddard. Anglo American suspended production at the Venetia mine in Limpopo in July, months after pouring US$2.2 billion into converting it to underground operations. Lab-grown stones are eating into the natural market, and demand from China has weakened. Standard & Poor's downgraded Botswana's sovereign rating in March and kept the negative outlook in September, warning that structural weakness in global diamond demand would keep squeezing growth, export earnings and fiscal receipts. When a ratings agency tells you that the core of your economy is structurally impaired, the responsible response is to diversify, not to double down.

The World Bank was blunter in its July report. It cited "a prolonged weakening of fiscal discipline, evidenced by repeated fiscal deficits and rising debt," and warned of "an unsustainable debt trajectory" unless the business environment improved and skills matched market needs. Notice what the Bank did not say. It did not say that Botswana lacks the ability to diversify. It said the need to diversify had long been understood, including by the government itself. For years the diagnosis has been written on the wall. The treatment has been postponed.

Keith Jefferis, a former deputy governor of the Bank of Botswana, put the risk plainly. The assumption that De Beers can be turned around once it leaves Anglo American's hands is, in his words, "clearly a risky assumption" given the company's recent losses and the collapse in natural diamond sales. New owners will also face large calls on capital for mine investment and restructuring, and they will carry any future losses. Who pays those calls? Not the consortium's chairman. Not the sightholders. The Botswana taxpayer, who already carries a debt load that has nearly doubled in two years, is the party most exposed.

The defenders of this deal are not fools, and we should not pretend they are. John Jeffay of the International Diamond Exchange argues that Boko wants more influence over De Beers so Botswana can capture more of the value chain: marketing, jewellery manufacturing, cutting, polishing and grading. Paul Zimnisky of Paul Zimnisky Diamond Analytics says diversification will not happen overnight and that the country still has enormous skin in the game. Those are serious arguments. But they rest on an enormous "if." Value-addition only pays off if the factories are built, the skills exist, the regulatory environment welcomes investors and the government does not treat the new stake as a cash machine for patronage. Botswana has been promising downstream beneficiation for a generation. We have yet to see it at the scale that a 30 percent stake would demand.

So let us ask it plainly, because the people of Botswana deserve a plain answer. Is this a strategic move or a reckless one? Did Boko and Penny see something the rest of the market missed, or has a government addicted to diamond revenue simply convinced itself that the addiction can be managed by buying the drug dealer's stock?

Botswana is not a failed state, and nobody should write it as one. This is the country that, after independence, built one of Africa's most stable democracies, kept elections credible, protected property and largely avoided the coups and civil wars that devoured its neighbours. Its success was not an accident. It came from institutions that held: a Bank of Botswana that guarded the currency, a public service that mostly followed the rules, and a fiscal culture that saved in good years. That is the Botswana model that other African states study. And it is exactly what is being tested now. Prudence built this country. Prudence is what is missing from this deal.

What should happen instead? First, Parliament must demand full disclosure of the purchase price, the financing structure, the expected returns and the contingent liabilities before a single pula is committed. No megadeal of this scale should be negotiated behind closed doors and presented as a fait accompli. Second, the government should commit in law to a fiscal rule that ties spending to conservative diamond price assumptions, with any windfall saved in a sovereign fund under independent management, not raided for recurrent expenditure. Third, the Auditor General and an independent economic council should publish regular reports on the investment's performance. Fourth, the state should accelerate what it has promised for decades: a business climate where tourism, agro-processing, digital services, light manufacturing and financial services can grow without needing a diamond mine's permission. Every private investor who creates a job in Francistown or Maun is a stronger hedge than any stake in a company that is losing money.

To the citizens of Botswana, we say this: you are not spectators in this gamble. The money at stake is your money, and the debt that grows if the bet fails will be paid by your children. Demand the numbers. Demand a vote in Parliament that is free from party whips. Demand that the government explain, in public and in detail, how a shrinking, downgraded economy becomes stronger by taking on more exposure to the single commodity that is collapsing. Demand that the next budget speak honestly about diversification, with targets and deadlines, not slogans.

To the African Development Bank, the regional bodies of Southern Africa and the investors who speak loudly about good governance, the test is also here. Governments that are serious about prudence should say so when a neighbour is putting its savings on a long-shot bet. Silence in the name of regional solidarity is not solidarity. It is abdication.

Boko was elected to protect Botswana's future, not to mortgage it on a falling market. If he is right, he will be vindicated by numbers that Botswana's people can see and verify. If he is wrong, the bill will arrive in the form of higher debt, cut services and a generation told to wait a little longer. We are not willing to wait. Neither should you.

Based on reporting by ISS