Botswana: President Boko Doubles De Beers Stake to 30%

• Botswana plans to double its stake in De Beers from 15% to 30% by purchasing shares from Anglo American.
• President Duma Boko also supports a Global Diamond Consortium's bid for the remaining De Beers shares, aiming for Botswana to become the largest shareholder.
• This move occurs despite a significant downturn in the natural diamond market and calls for Botswana to diversify its diamond-reliant economy.
• Botswana's economy contracted in 2024 and 2025, with national debt rising, prompting concerns from the World Bank and credit rating agencies.
• Observers view the increased investment in diamonds as a risky "gamble" given the market's instability and the country's fiscal challenges.

President Boko emphasized that this move would establish Botswana as the 'single largest shareholder,' thereby granting it 'greater influence in the strategic decisions' of the company for years to come, marking a 'new chapter in Botswana's diamond story.'

President Duma Boko of Botswana recently declared the nation's intention to significantly increase its ownership in the diamond conglomerate De Beers. The country's stake is set to double from 15% to 30%. This acquisition involves purchasing additional shares from Anglo American, which is in the process of divesting its 85% holding in De Beers. While the exact transaction value remains undisclosed, market speculation suggests a figure around US$1 billion, though some characterize the sale as a "fire sale" given current market conditions.

Beyond this direct increase, President Boko has also expressed support for the Global Diamond Consortium's bid to acquire the remaining portion of De Beers. This consortium, chaired by former De Beers CEO Gareth Penny, includes several of De Beers' major clients, alongside the governments of Namibia and Angola, both significant diamond-exporting nations. There is also a possibility of Oman's involvement. Penny highlighted the collaborative effort between the consortium and Botswana, aiming for co-ownership of De Beers. President Boko emphasized that this move would establish Botswana as the "single largest shareholder," thereby granting it "greater influence in the strategic decisions" of the company for years to come, marking a "new chapter in Botswana's diamond story."

This strategic maneuver comes despite long-standing advice for Botswana to diversify its economy away from its heavy reliance on diamonds. Historically, diamonds have been the bedrock of the nation's economic prosperity, accounting for over 70% of its exports, approximately one-third of government revenue, and about a quarter of its gross domestic product. The successful 50-50 joint venture, Debswana, with De Beers, coupled with Botswana's existing 15% stake in De Beers, has been a cornerstone of the country's economic and political stability.

However, the natural diamond market has faced significant headwinds since late 2023. A notable decline in global prices, primarily driven by increased competition from more affordable lab-grown diamonds and reduced demand from China, has diminished the industry's luster. This downturn has had tangible effects on Botswana's economy, which experienced a contraction of 2.8% in 2024 and a further 0.7% in 2025. A July report from the World Bank further exacerbated concerns, pointing to a "prolonged weakening of fiscal discipline," characterized by persistent fiscal deficits and a rising national debt, which escalated from approximately 22% of GDP in 2023 to nearly 40% in 2025. The World Bank underscored the urgent need for diversification, a requirement understood by the government, to avoid an "unsustainable debt trajectory" unless the business environment improves and skills align with market demands.

Despite these economic pressures and calls for diversification, President Boko's decision to deepen Botswana's investment in diamonds has raised eyebrows among many observers. Ed Stoddard, a mining correspondent for Daily Maverick, characterized the move as "a gamble with the odds heavily stacked against Botswana's bet." Stoddard highlighted the "relentless" downturn in the natural diamond market, noting a 32% drop in average uncut gem prices during the first half of 2026. He also cited Anglo American's suspension of production at De Beers' Venetia diamond mine in Limpopo in July, shortly after a $2.2 billion investment to convert it to an underground operation, as a significant warning sign.

Critics suggest that this increased commitment to diamonds could jeopardize Botswana's previously stellar reputation for economic prudence. Standard & Poor's (S&P) downgraded Botswana's credit rating in March and maintained a negative outlook in September. S&P's assessment indicated that the "structural weakness in global diamond demand will continue to constrain Botswana's economic growth prospects, as well as its export and fiscal receipts, putting pressure on the country's external and fiscal buffers," reinforcing the concerns about the country's economic trajectory.

Lawyers advising on M&A, international trade, or sovereign risk in Botswana should note the government's increased stake in De Beers, which signals a significant shift in control and potential economic implications for the country's diamond sector and overall fiscal health. This move could influence future regulatory frameworks, supply chain dynamics, and investment stability within the region.

Source: Original reporting via News 2 4 and Daily Maverick.