The Botswana government has in mind a consortium with partners such as the Oman Investment Authority and/or Angola's Endiama to spread the risk of any acquisition. Even so, taking control of a loss-making business would still require significant borrowing, placing real strain on Botswana's public finances.
Despite significant challenges, Botswana is the only mainland country in sub-Saharan Africa with investment-grade sovereign debt. Buying a controlling stake in De Beers risks putting that hard-won credibility at stake. Whether the investment makes sense comes down to two questions: can De Beers be successfully turned around under state ownership, and are there alternative uses of Botswana's sovereign resources that would better secure the country's long-term future?
