It is well-documented that Botswanan soil is very rich in diamonds, which has secured its financial future with De Beers to improve the country’s living standards.
SPOTLIGHT ON THE BOTSWANA DIAMOND INDUSTRY
The small landlocked nation of Botswana in Southern Africa is the second-largest producer of diamonds in the world. Furthermore, its colourless gemstones are essential to stabilising the country’s economy and building infrastructure.
Indeed, Botswana relies on diamonds for 90 percent of its exports, and the industry is directly responsible for one in 20 jobs. Meanwhile, last year the gemstones accounted for around 30 percent of Botswana’s revenue, with De Beers depending on the nation for about 70 percent of its rough diamond supply, equating to 24 million carats.
In order to operate in Botswana, De Beers founded the De Beers Botswana Mining Company in 1968, later evolving into Debswana. Today, the company has four diamond mines and is the world’s leading producer of diamonds by value.
De Beers provided the necessary conditions for Botswana to experience the highest economic growth rate since its independence from Britain in 1966 when it agreed to a joint venture with the government, accruing revenue from diamonds. However, since 2000, the economy’s growth rate began to stall and was below the sub-Saharan African average. To negate this, along with persistently high unemployment, the government of Botswana introduced a policy to diversify the economy.
Additionally, Botswana is one of the few sub-Saharan African countries that has truly benefitted from its mineral wealth. Thanks to the iconic and timeless diamonds, it is now considered a middle-income country, a status it has been elevated to within the last 50 years.
A major contributor to the country’s wealth is the Debswana Jwaneng Mine, located in the Naledi River Valley in Southern Botswana, which is one of the world’s deepest, most valuable diamond mines. Significantly contributing to the economy since it opened in 1982, approximately 50 percent of public revenue, 33 percent of GDP, and over 80 percent of foreign earnings, the mine is committed to empowering the community by tripling its citizen spending and increasing employment.
One of the most successful elements of the industry is diamond beneficiation – the downstream possessing of rough diamonds, which were previously exported as rough diamonds and processed elsewhere. In fact, the local marketing of domestically produced gemstones has helped the diamond-cutting and polishing field, creating additional industrial jobs in the country. Consequently, it is now the largest manufacturing sub-sector in the country, growing at an exceptional rate, with factories continually adopting and employing new technologies.
Botswana’s joint venture with De Beers has also facilitated publicity for its diamond industry from an unexpected source, as the British royal family is known to have a connection to its diamond market. Prince Harry, the Duke of Sussex, designed an engagement ring for the Duchess of Sussex, Meghan Markle, with a cushion-cut diamond, having travelled to the country to select it personally.
Known as the Markle Sparkle effect, the Duchess’ influence extends to the Millennial population, who want to buy sustainable and ethical diamonds and emulate the antique aesthetic of the classic cushion-cut stone, ultimately benefiting the local population.
This royal recognition is priceless for Botswana, placing its diamond industry as a producer of conflict-free jewels, which appeals to a new generation of diamond buyers. The social and ecological responsibility displayed by the Duke and Duchess of Sussex has, in some way, contributed to the country’s transformation into one of Africa’s economic success stories. In fact, the African Development Bank has praised Botswana for one of the world’s longest-sustained economic booms.
Q&A WITH SIDDARTH GOTHI, CHAIRMAN, BOTSWANA DIAMOND MANUFACTURERS ASSOCIATION (BDMA)
BDMA’s objective is to represent and advocate for its members while advancing the interests of the diamond industry – the lifeline of the country’s economy. We speak to its Chairman, Siddarth Gothi, about the role BDMA plays in developing the dynamic presence of diamonds in the global gemstone market.
Firstly, could you talk us through the origins of BDMA – what led to its creation and what is its current vision and mission?
Siddarth Gothi, Chairman (SG): BDMA was established as a non-profit organisation (NPO) in 2007; today, it is the voice of Botswana’s diamond-cutting and polishing industry, consisting of De Beers Sightholder members and associated members, who are cutting and polishing license holders in Botswana and brokers for the industry.
It began with a vision to create a sustainable diamond industry in Botswana by utilising the country’s most valuable resource in tandem with fostering inclusiveness, thereby driving the country’s sustainable economic development and social transformation.
How has BDMA developed and progressed regarding its mission, and what has it achieved?
SG: The initial mission was to represent the beneficiation and localisation of the industry in order to align it with government policies. This was followed by the aim to become the most important and responsible stakeholder in the Botswanan diamond industry and to ensure a stable and conducive business environment for industry players and relevant stakeholders.
Subsequently, our core values remain in continuing to develop a culture of professionalism, integrity, trust, continuous learning, collaboration and consultation amongst the industry members and its stakeholders.
“Our core values are developing a culture of professionalism, integrity, trust, continuous learning, collaboration and consultation amongst the industry members and stakeholders”
Siddarth Gothi, Chairman, Botswana Diamond Manufacturers Association
For you, what is the most exciting aspect of the diamond industry in Botswana?
SG: Botswana has been lauded for its effective management of diamond supply. De Beers backs this through its Global Sightholder Sales (GSS) headquarters, which positions the country as an exciting destination for diamond cutters and polishers. This is due to the guaranteed access to diamonds, available for local Sightholders of De Beers, who cut and polish their diamonds within the country.
Furthermore, the country’s good governance and a red-carpet welcome to the diamond-cutting and polishing factories have made Botswana the favourite destination for these services.
Conversely, what are the biggest challenges facing the industry at present?
SG: The absence of a diamond training school, which is vital for sustaining the diamond-cutting industry, is a current challenge. The key industry players do not have access to an available skilled workforce; therefore, the factories are expected to invest heavily in training the workforce locally. This leads to a higher cost in the production of diamonds within the country compared to India, which is the world’s largest and most economic diamond-cutting centre.
Moreover, the sudden increase in Botswanan diamond-cutting factories during 2022 has led to a severe employee movement within the industry, due to the shortage of an available skilled workforce.
The fast increase was a shock to existing factories in Botswana, whilst putting a strain on the established cutting facilities, which were operating smoothly before the infusion of almost 20 new factories within one year.
After a reduction in polished diamond purchases in the US and China, the global diamond industry slowed down as the industry’s midstream sector continued to take a cautious approach in Botswana. However, even though the factories are seeing a slowdown as a result of ongoing macroeconomic challenges, the future looks optimistic.
Are there any key aspects of the industry you would like to highlight?
SG: As President of Botswana H.E. Eric K Masisi says, “Botswana are diamonds, and diamonds are Botswana.” We are a country heavily dependent on diamonds, as they have served the country well for over five decades since independence. Therefore, the diamond industry has helped the country move from poverty to upper middle-income status, accelerating its economic growth. During this time, additional high levels of public spending have created a better standard of living for the majority of the population.
Botswana’s economic growth also increased revenue, allowing for further developmental investment, and lifted national wealth levels rapidly, allowing for public services and facilities – once merely just aspirational – to be developed. This includes free public healthcare, access to free primary and secondary education, and the development of transport, energy and water infrastructure.
Botswana has managed to leverage the potential of its diamonds. As former president Festus Mogae states, “For our people, every diamond purchase represents food on the table, better living conditions, better healthcare, potable and safe drinking water, and more roads to connect our remote communities.”
In addition to supporting local communities through cutting, polishing, and buying diamonds with known provenance from De Beers GSS, our members support local economic development. The diamond industry is a major contributor to the national economy, and by purchasing diamonds from the country, we contribute directly to the nation’s economy and add value to the local industry while supporting over 4,200 local jobs.
Diamonds positively impact the community and country; the vital product has become value-added by being exported after being studded into beautifully crafted pieces of Botswana jewellery. Additionally, the benefits of working with Botswana Diamonds extend beyond the conflict-free label. Ethical diamonds mean no human rights abuses, and employees are fairly paid with safe working conditions and environmentally sound practices.
Are there any plans, goals or projects in the pipeline, or in the future for BDMA?
SG: As an important stakeholder in the diamond industry, BDMA significantly impacts policy and decision-making with the relevant authorities in Botswana. We also participate in sector-level consultative meetings with various stakeholders.
With the help of its members, BDMA strives to support communities through various programmes, such as supporting the health sector through its member Diacore, which organises Botswana’s most popular and largest marathon – the Diacore Gaborone Marathon. Alongside this, BDMA recently donated cars to Child Line Botswana as part of its CSR project, and its members donate blood to the Botswana National Blood Transfusion Services to support the shortage of blood within the country.
BDMA organises some of Botswana’s most exciting sporting events, such as the BDMA Football League, BDMA Cricket League, and BDMA Netball League. These matches help build employee morale and develop team spirit. Indeed, during a recent football final, the company had over 1,000 spectators watching the game, and employees stayed back for the sundowner party.
Apart from this, BDMA hosts a few networking events and workshops where the members get to network and learn from the experts within the industry.
Finally, how do you see the industry developing over the next five years?
SG: The role of BDMA is to ensure the industry is functioning smoothly and, therefore, to resolve any industry issues efficiently and appropriately. We also conduct industry-related workshops occasionally for the purpose of knowledge sharing and shaping up the industry for a better future.
We hope to see more beneficiation of the diamonds within the country and higher localisation through the inclusion of skills transfer and a greater citizen workforce.
Apart from this, a reduced carbon footprint for diamonds using green energy and recycling is something that is crucial within the industry. Whilst a more business-specific development would be value-adding Botswana Diamonds jewellery manufacturing.
BDMA is a critical partner in boosting the success of the diamond industry in Botswana. The services it provides to its members help to develop businesses by finding optimal solutions and answers for any challenges. It organises regular meetings and workshops with the relevant authorities for its members and discusses industry-wide solutions and facilitates knowledge transfer to its stakeholders.
BDMA has always represented those in the diamond cutting and polishing industry through advocacy to advance the industry’s interests by giving one voice to members.
BOTSWANA DIAMOND MANUFACTURERS ASSOCIATION PARTNER
