Botswana Eyes Alternative Markets; Expert Urges Continued Development Of Diamond Industry

The southern African nation is plotting economic diversification as it looks to counteract the challenges in its key industry. 

Diamonds account for approximately 80% of Botswana’s export revenue and 30% of its GDP, but dropping prices, spurred, in large part, by the rise of lab-grown stones, have exposed the economy’s vulnerability to market shocks. Now, the focus seems to be on value addition and diversification.

Eyeing alternative revenue streams underground, in early, July, the country’s Minister of Minerals and Energy, Bogolo Joy Kenewendo, announced the department’s goal of increasing non-diamond mineral exploration expenditure to roughly $11 million by 2029. 

This comes amid momentum with the nation reportedly entering the final stages of establishing its first Manganese Mine after a feasibility test by Canadian-owned Giyani Metals confirmed economic viability. 

In February, Kenewendo revealed that around 70% of its land remains unexplored, showcasing the untapped potential on offer. 

While expanding mining operations is a priority for the nation, so, too, is beneficiation. Speaking at Gaborone’s Future of Mining Summit in late June, Mogakolodi Maoketsa, General Manager of Debswana Diamond Company, stressed the importance of local industrialization, believing it to be a value-added agenda that would benefit internal and external value chains.  

“Mining companies can provide the initial market base needed for local manufacturers to grow, improve their capabilities, and eventually compete beyond the mining sector,” he said. 

The view is that local procurement can lay the foundation for economic diversification, encouraging more capital to circulate, possibly uplifting everyone from the local shopkeeper to unemployed individuals, seeking work.

Offering on-the-ground insight, Charles Siwawa, CEO of the Botswana Chamber of Mines, reveals to FORBES AFRICA that all mining companies operating in the country have entered into an agreement that would support local manufacturing, but acknowledges that doing so would take time “due to various factors among them business acumen by potential investors, financial availability and access, ability to break into the market and so forth”.

Despite capital dictating the pace of development, he believes financial institutions have grown an appetite for manufacturing, sharing that progress has been made in Botswana’s “mining equipment manufacturing with tapping of the international market… The chemicals industry has also been tapped into locally with various manufacturers and suppliers at different levels of product range… Engineering services have also grown significantly”.

Looking at projected industry growth, Siwawa predicts the manufacturing sector, which he says currently contributes to 6.5% of Botswana’s GDP, could reach double-digit percentages in the coming years.  

Though the nation is hoping to divert reliance on diamonds for economic growth, Dr Akisa Mwangi, Chairman of the Department of Mining, Materials and Petroleum at Jomo Kenyatta University of Agriculture and Technology, reminds FORBES AFRICA that, in this field, they have abundant reserves, established networks and institutional experience. 

So, while Botswana’s diversification strategy should remain at full steam, it shouldn’t neglect what it already has. 

“Since they already have a head start, implementing the right policy framework would make sure that they become the regional Diamond beneficiation hub… Value addition of the diamond will help in maximizing its economic value, lead to the creation of more jobs and skills development within the value chain,” Mwangi adds.