Is a controlling stake in De Beers a pyrrhic or hidden blessing for Botswana?

LETLHOGONOLO LAMONG | Monday October 13, 2025 06:00

For half a century, our country’s fortunes have been inextricably tied to diamonds, glittering stones that have illuminated Botswana’s fiscal stability and national pride. But the shine of this prosperity now flickers under the shadow of global uncertainty, softening diamond prices, and the growing presence of synthetic alternatives that challenge both market dominance and sentiment.

The government, under the stewardship of President Duma Boko, has reignited an audacious conversation. One that dares to question the historic balance of power in the diamond world. Should Botswana, already holding a 15 percent stake in De Beers and a 50 percent stake in Debswana, reach for the ultimate prize: a majority shareholding in De Beers itself? The idea is both exhilarating and daunting, promising sovereignty over one of the world’s most iconic diamond brands while testing the country’s financial, managerial, and strategic nerve.

To appreciate the magnitude of this moment, one must recall the foundations of Botswana’s diamond ascendancy. For decades, the partnership between Botswana and De Beers, embodied in the Debswana joint venture, has stood as a textbook example of how equitable resource partnerships can uplift nations. Revenues from diamonds built roads, funded education, and delivered affordable healthcare to our compatriots.

On the flipside, as this partnership prospered, the underlying architecture unfavourably remained skewed: Botswana confined to the shallow end of the revenue stream, the mining and selling of the rough stones, while De Beers, and its global machinery, unapologetically spread its wings widely and aggressively, capturing a significant slice of the more lucrative downstream value chain; cutting, polishing, marketing, and retailing, the space where the true margins lie.

In recent years, Botswana has pressed successfully for incremental control, securing new agreements that raise its share of diamond sales. But the ambition for a seat at the helm of the entire De Beers empire signals a profound philosophical shift. This is not merely a negotiation about percentage points. It is a bold and decisive declaration of intent to the entire world: that the era of African producers being confined to the upstream segment of global value chains is drawing to a close.

There are compelling arguments for Botswana to move decisively. Majority control of De Beers would grant the nation unprecedented influence over pricing, supply management, and branding strategies. It would allow us to directly shape the narrative of natural diamonds, their rarity, provenance, and ethical pedigree. This at a time when such gripping storytelling may be the only veritable shield against the rising tide of laboratory-grown competitors. Ownership of that narrative would mean not merely extracting wealth from the ground but defining the meaning of diamonds in a changing world.

The material benefits could be substantial. With control of De Beers, Botswana could expand its presence across the diamond value chain, developing a local cutting and polishing industry on a grander scale, investing in jewellery manufacturing, and intentionally retaining the value that now accrues elsewhere. Such vertical integration could create skilled employment, foster new industries, and reposition Botswana as not just a producer of gems but as a sophisticated participant in the global luxury economy.

However, boldness carries its own perils. The company is wrestling with structural headwinds that no shareholder can wish away. The natural diamond market has softened; inventories are rising; and demand in the two critical consumption markets of China and the United States has faltered.

Meanwhile, lab-grown diamonds, once dismissed as fickle novelties, have matured into formidable competitors. Produced with scientific precision, virtually identical to natural stones, and sold at a fraction of the price, these synthetic gems have captured a growing share of the market, especially among younger worldwise consumers less bound by tradition and loyalty to natural resources.

Botswana’s timing, therefore, is both opportunistic and risky. Anglo American, which owns 85 percent of De Beers, has signalled its willingness to divest, presenting our country with a rare opening to negotiate favourable terms. But this same window may also reflect De Beers’ weakened position. Let us not hoodwink ourselves; Anglo-American would be unwilling to exit De Beers under circumstances that would lead to financial or strategic disadvantage.

Casting aside any meretricious optics probably dangled before us to blind objective vision, their analysis leaves little doubt: in their considered view, exiting the investment offers superior value to maintaining it. Although the name De Beers may cloud one’s judgement, for all its historical legacy, the truth is, this entity is not the business behemoth it once was. The diamond giant has seen its value plummet from an impressive $11.6 billion in 2022 to $7.6 billion in 2024, and further down to $4.9 billion in 2025 after successive impairments. The upshot: a jaw-dropping 58% wipeout in value in just under five years. Pause and let that unpleasant reality sink in. The warning cannot be more unambiguous: increased investment in the company demands rigorous scrutiny and a sober assessment of risk.

Acquiring a majority stake at the wrong valuation could prove a Pyrrhic victory, saddling Botswana with an expensive and volatile asset in a declining market. We need to contend with three questions. Do we possess the insight to make a decision of enduring strategic value?Do we have the foresight to act in a manner we will not regret? Or are we naively riding on legacy with the hope that hindsight will, in time, serendipitously vindicate us?

Purchasing a controlling interest would require billions of Pula in capital; a sum that could strain Botswana’s fiscal framework and potentially unsettle its traditionally strong credit ratings. Debt-financed acquisition, unless carefully structured, could jeopardise the very stability that has consistently defined Botswana’s economic model. Moreover, majority ownership would expose the government not merely to financial risk but to operational complexity. De Beers is a sprawling global entity with multifaceted operations across continents; marketing, retail, technology, logistics, and regulatory compliance. Running such an enterprise requires not only capital but business leadership sophistication, brand acumen, and global networks that few governments possess.

However, one would be insane to dismiss the historic dimension of Botswana asserting majority control over De Beers. It would represent not only an economic act but a reclamation of agency. Botswana has already written part of that story through sound governance, integrity, and partnership. A further step toward ownership could complete the arc. But for that symbolism to translate into prosperity, execution must be impeccable.

Success will depend on a constellation of crucial factors, such as rigorous valuation, transparent governance, strategic alliances, and visionary marketing. The government would need to acquire or attract the human capital capable of steering a global brand, from finance to luxury retail. It would need to champion strategic and ethical sourcing, environmental responsibility, and social equity; crucial governance values increasingly prized by modern consumers.

Furthermore, Botswana would have to redefine the meaning of natural diamonds in a post-synthetic era. The battle ahead is not between mined and manufactured stones but between stories of the romance of geological time and the rationality of technology. If Botswana, as majority owner, can persuade the world that a natural diamond is not just a carbon crystal but a legacy of the earth itself, a tangible link between nature, time, and human emotion, it may, and underscore the word may, recapture the market’s heart even as synthetics flood its shelves. Such rational storytelling, anchored in authenticity, may prove to be the nation’s most valuable pitch.

The opportunity also demands financial and strategic innovation. The government could consider a phased acquisition, spreading the financial impact over several years, or forming a consortium with other sovereign or ethical investors who share its vision. Revenue streams from Debswana could be leveraged to fund the buy-in, while downstream profits could be reinvested into marketing and diversification. With prudent structuring, the risks could be contained, and the benefits magnified.

Caution is warranted. Ownership does not automatically confer control; nor does control guarantee success. Global consumers are capricious, markets cyclical, and technological disruption unsparing. A misstep in brand strategy, a failure in governance, or an unforeseen market downturn could erode both financial returns and reputational capital. Botswana’s hallmark has been prudence; the slow, deliberate and enduring building of wealth rather than its reckless pursuit. That instinct for informed moderation should not be abandoned now, even in the face of what feels, sounds, smells and looks like a historic opportunity.

A majority stake in De Beers, executed wisely, could enable Botswana to transcend its role as a producer and emerge as a global tastemaker in the diamond industry. It could redefine how Africa participates in the global luxury economy, inspiring other resource-rich nations to seek not just equity but leadership. But done hastily or sentimentally, it could tie the nation’s fortunes too tightly to a market whose long-term trajectory remains compromised.

Across the African continent and beyond, several nations have embarked on bold journeys to reclaim control over their natural resources. These ventures are often animated by nationalist fervour, economic pragmatism, or a deep-seated yearning to correct historical inequities. These experiences, diverse in outcome and method, provide a revealing mirror for Botswana as it contemplates expanding its controlling stake in De Beers.

Namibia offers perhaps the most proximate and relevant case study. Through Namdeb Holdings, a 50:50 joint venture between the Namibian government and De Beers, the country secured not only a share of profits but also a stronger voice in operational decisions. This partnership, while not free from friction, has afforded Namibia a higher degree of autonomy in local beneficiation, job creation, and resource stewardship. Turning the lens towards the other end of the spectrum, the Namibian experience also reveals the complexity of sustaining profitability amid fluctuating global demand. Botswana would thus do well to study how Namibia has balanced state participation with market discipline, ensuring political aspirations do not cloud operational efficiency.

Across the Atlantic, Chile’s story with copper, particularly through Codelco, stands as one of the world’s most iconic cases of successful resource nationalism. When Chile nationalised its copper industry in the 1970s, sceptics predicted economic ruin. Yet, decades later, Codelco emerged as a pillar of fiscal stability, a consistent contributor to national revenues, and a source of national pride. However, the Chilean model worked largely because of the state’s relentless commitment to technocratic governance and operational professionalism, insulating Codelco from the corrosive effects of political interference. Botswana, famed for its institutional prudence, could adopt a similar ethos. One that combines ownership ambition with management excellence, ensuring any increased control in De Beers does not become a political ornament but an engine of long-term national value creation.

Nigeria’s flirtation with control over its oil industry through the Nigerian National Petroleum Corporation (NNPC) paints a more sobering picture. Despite vast resource wealth, chronic mismanagement, opaque accounting, and political patronage undermined the NNPC’s potential. The result has been a paradox of plenty: a nation rich in hydrocarbons but poor in governance dividends. For Botswana, Nigeria’s experience underscores the peril of allowing state ownership to morph into state capture. Transparency, competence, and fiscal discipline must therefore be the iron pillars upon which any expanded stake in De Beers rests.

The foregoing examples resonate with this indisputable theme: ownership alone does not guarantee prosperity. The true test lies in how that ownership is managed, monetised, and modernised. Botswana, in contemplating a higher controlling stake in De Beers, must therefore strike a resilient balance between sovereignty and sustainability, between economic nationalism and global competitiveness.

The lessons from these diverse experiences converge on a single truth: resource control, while empowering, can be a double-edged sword. It can be a ladder to national prosperity or a trapdoor to inefficiency and decline. Botswana’s path forward will depend not on how much it owns, but how well it governs what it owns, ensuring that its diamond destiny remains a symbol not of extraction, but of enduring excellence.

The prospect of a greater stake in De Beers is not, in itself, a guarantee of either triumph or tragedy. It is a test of institutional maturity and vision; a warts and all mirror reflecting the country’s evolving understanding of sovereignty, value creation, and global competitiveness. And should the government succeed, history will record that in the very era when artificial stones threatened to dull the world’s appetite for diamonds and drive the country’s economy to its knees, during the reign of one Duma Boko, the one-year old Botswana government calmly, confidently, and unflinchingly restored their meaning.

The challenge before Botswana, therefore, is to ensure that ownership translates into empowerment, not encumbrance; that control yields creativity, not complacency. In the shimmering calculus of diamonds and Botswana’s emerging future, the line between blessing and burden could be as fine as the facets of the stones themselves. Botswana must decide, with the caution of a prudent custodian and the courage of a visionary pioneer, whether its next move in the De Beers partnership will secure enduring brilliance or fleeting glitter. Whatever course we pursue, the risks and rewards sparkle as brightly as the precious gems in question.

If pursued with discipline, clarity, and long-term purpose, an increased shareholding could well emerge as a hidden blessing; an unmistakable tour de force and well-conceived landmark manoeuvre that deepens national participation, strengthens domestic beneficiation, and positions Botswana as the undisputed moral and strategic leader in the global diamond arena. But if mishandled, clouded by populism, self-laudatory antics or bureaucratic overreach, it could just as easily devolve into a Pyrrhic blessing; a glittering but fleeting victory that conceals structural fragility beneath the veneer of its illusory shine.