The myth of diamond dependence :: Mmegi Online

The collapse of public health and government’s mounting arrears has reignited the unchecked familiar claim that “diamond sector dependence is to blame”. However, even in a diversified economy, a state that has grown too large, too expensive, and too consumption-driven will eventually fail to sustain the services it promises, writes TIMOTHY LEWANIKA

As export revenues weaken, the pula softens and economic growth stalls, diamonds are routinely identified as the faltering pillar dragging the economy toward the abyss. Yet this diagnosis confuses cyclical shocks with deeper structural failures. Commodity prices fluctuate but economic models endure. Countries with sound fiscal structures absorb shocks and adjust. Those overextended with billions in commitments, do not.

The consistent blaming of the diamond market fails to account for the unproductive use of capital in a growing recurrent expenditure that prioritises consumption over investment. It fails to point out that government size is too big and does not have the capacity to carry its capital requirements.

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