Every chance it gets, De Beers has been keen to stress that it is has a special relationship with Botswana, that through the Debswana Diamond Company, it helped transform it from one of the poorest countries in Sub-Saharan Africa to an economic miracle.
“De Beers has also respected and supported the broader developmental aspirations of Botswana, while the Government has granted De Beers long-term access to diamond supply,” says the South African company on its website, in one respect echoing a sentiment that has been expressed elsewhere by experts.
One of those experts is Dr. Keith Jeffries, a former Deputy Governor of the Bank of Botswana and consultant who has written extensively about the Botswana-De Beers relationship. Last year, he stated that De Beers allows for diamond revenues to at once yield 80 percent profit and 80 percent tax tab in favour of the Botswana government.
However, the analysis of Jeffries and other experts expressing similar sentiment has been challenged by Professors Christian John Makgala and Monageng Mogalakwe and David Magang in a paper published in a special issue of the Botswana Notes and Records that honours Professor Fred Morton on his retirement from the University of Botswana in 2020. In it, they elaborate the ways in which De Beers short-changed Botswana for as long as it has done business in the country.
“What these experts overlook is that Botswana’s dependence on De Beers’ investment and technical knowhow since independence translates to the country’s perpetual economic colonisation by South Africa considering that De Beers originates in that country. One of the authors of this paper, David Magang, on the basis of his experience as a former minister responsible for mines, states that all the intellectual and technical work in respect of diamond mining activity in Botswana has always been done in South Africa not Botswana.”
The elaborate detail that Magang goes into in his book, The Magic of Perseverance, shows that the relationship between Botswana and De Beers is anything but special. Magang served a stint as the Minister of Mineral Resources and Water Affairs which was later reconfigured and renamed. From this vantage point, he got to witness how De Beers maintains a stranglehold on Botswana’s political leadership.
“The De Beers had for decades frustrated or thwarted Botswana’s efforts to try and beneficiate the country’s diamonds for value chain benefit and creation of more gainful employment,” Makgala, Mogalakwe and Magang say in their paper, adding that the company’s position on diamond beneficiation didn’t change until 20006 when President Festus Mogae started playing hard ball. “This saw the dawn of the beneficiation epoch in the country although it was more than 30 years late.”
This period also saw the relocation of De Beers’ Diamond Trading Company International (DTCI) from London to Gaborone in 2013.
Some appreciate the Botswana-De Beers relationship as asymmetrical because to their understanding, one partner (Botswana) needs the other while the reverse is not true. Conversely, Makgala, Mogalakwe and Magang assert that in today’s world, De Beers is actually not indispensable because it competes with companies like Alrosa and Rio Tinto.
“Nevertheless, the marriage between De Beers and Botswana government has essentially been cast in stone.”
About the same set of words have been used to describe the highly confidential partnership agreement between Botswana and De Beers. It is to be expected that an agreement of this nature will be confidential but the level of confidentiality around this one is highly unusual because only one person in government (the president) reportedly knows its contents. On account of the latter, successive auditors general have not been able to determine whether Debswana’s books of accounts are in order because they don’t have access to this agreement.
With financial power comes political power and De Beers is said to wield so much power that it practically decides who should be in power and when they should leave office.
“It must also be borne in mind that the De Beers movers and shakers are not as innocuous as they may appear. They have a subtle or covert way of having a say in who takes the political reins in Botswana or ‘state capture’. It is common knowledge, for instance, that De Beers had much to do with both the retirement of President Masire (1980-1998) and the accession of Lt. Gen. Ian Khama to the presidency of Botswana first as vice president to President Festus Mogae in 1998, and then president from 2008 to 2018.”
The paper doesn’t say this but both Masire and Khama have actually confirmed the latter assertion in a different context. A little over a decade ago, Sunday Standard published a story that, following the Botswana Democratic Party’s dismal performance in 1994, De Beers worried that the party might lose in the next election. That would have put the opposition in power, which opposition has long lamented the secret Botswana- De Beers deal and may want to renegotiate it. Upon conviction that Masire was a spent force, De Beers literally bought him out of office. With as much paper trail as there was, Masire knew better than to deny the deal. As regards Khama, he told The Monitor in its very early days that some businesspeople essentially recruited him into politics. A newbie to politics, Khama didn’t realise the full import of his statement. Thereafter, it was a matter of connecting the dots: a De Beers-funded study recommended a Khama-type character to join the BDP and re-energise it and it was Khama who would do so.
On the whole, the paper aligns De Beers with a broader South African agenda to under-develop Botswana such that it never competes with South Africa. Another such company that the authors name is South African Breweries. Apartheid South Africa had sabotaged Prinz Brau, a brewery set up by the Botswana Development Corporation by smuggling foreign objects (like dead insects) into the plant and somehow sealing them inside beer cans and bottles. This turned consumers off Prinz Brau products and the company shut down. For what it is worth, democratic South Africa uses less extreme methods but sabotage remains the end goal.
“A retired Kgalagadi Breweries master brewer informed us that popular Botswana beer, St Louis, was so liked in South Africa that white farmers on the Botswana-South African border crossed into Botswana to buy it in bulk. This led to the Kgalagadi Breweries introducing St Louis into the South African market, but surprisingly it performed badly there. The master brewer states that when they happened to be in South Africa even as far afield as Durban, upon enquiring about St Louis in bars where it was not displayed in fridges, the staff would retrieve it from the storerooms where it would have gathered dust for a long time. It is suspected that just like the fate of Prinz Brau, the SAB may have been behind the failure of St Louis in South Africa.”
Makgala is a lecturer in the History Department at the University of Botswana while Mogalakwe works for the Institute for Advanced Study of African Renaissance Policies Ideas.
