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The art of the deal

The popular story is that diamonds were discovered in Botswana sometime around Independence and what was once a small, agrarian “backwater” economy transformed into the Jewel of Africa.

Beneath this popular narrative, lies the often overlooked story of how the nation’s early government negotiated and crafted mineral deals that even today have scarcely been replicated elsewhere in the continent.

In post-colonial Africa, mineral deals were often heavily exploitative of the resource nation and in Botswana’s case, the odds in those post-Independence were stacked even worse against the young government as De Beers was not just the powerful multinational at the table, but also the entity with the single biggest influence on the prices of the commodity being negotiated.

Since then, that initial deal has been renegotiated several times and to their credit, successive technocrats have sealed increasingly better deals for Botswana, most notably moving the entire diamond world to Gaborone in 2013.

Yet again, minerals minister, Eric Molale leads a team of five senior government officials who are about to begin talks to secure an even better deal, as the current arrangement ends in September 2020.

The bargaining chips are weaker than in previous talks, as the four major mines all enter critical end-life stages which involve pumping in billions more of pula to recover a diminishing amount of rough diamonds. On top of that, analysts are already asking what else Botswana could possible squeeze out of the deal. From diamond polishing to aggregation to sales, the major boxes have been ticked, it is argued.

The answer is a whole lot more and critically,

in the area of citizen empowerment. The new deal needs to get to grassroots level, and ensure that the impact of diamonds lives far beyond the actual presence of the shiny stones beneath our soils.

Clauses must be included that ensure Batswana are empowered in areas such as Debswana’s procurement, small scale mining in general, cutting and polishing, jewellery manufacturing, and other economic sectors currently beyond their reach.

The efforts presently being powered by De Beers and Debswana in entrepreneurial initiatives are a step in the right direction, but certainly far below the scale required to build a sustainable legacy of development after the mines run out.

The debate should be had and in this light, it is about time the veil of secrecy around these negotiations is lowered, to at least allow public feed-in. Without doubting the competencies of Molale’s team, not one member of his entire team is publicly elected, including the Minister himself.

Divorcing ordinary citizens from such momentous developments often leads to situations of low buy-in for and resentment of the final deal. Conversely, providing an inlet for their contributions, at any point, through their elected representatives, not only produces a more inclusive process, but is also in line with the culture and spirit that built this Republic.

And it is also not harmful to the final process.


Today’s thought 

“Don’t bargain yourself down before you get to the table.”  

- Carol Frohlinger





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