Wednesday, May 22, 2024

De Beers, gov’t ‘marriage of convenience’ pulled Botswana out of poverty

Although the marriage between De Beers and government of Botswana has often been described as ‘marriage of convenience’, a recent study on Botswana diamond mining by Bench Marks Foundation has been seen to be lacking as it ignores the broader benefit of the relationship to the general economy.

The church based NGO, Bench Marks Foundation, posits in the study that De Beers motive is profit, exploitation and the marginalisation of communities where mining activities are taking place.

Executive Director of Bench Marks Foundation, John Capel, stated in the study that while De Beers gives a lot to state coffers, ‘this relationship is riddled with complexities’ where the government benefits revenue wise, but appears to lack the political will to ensure mining does not harm indigenous communities.

“The working class and poor suffer as second class citizens and disposable labour, while the mining companies produce glossy sustainability reports, showing Botswana as an African success story and truly democratic and sustainable society,” Capel observed.

The Lead Researcher for the report, David van Wyk, is even straight forward by dismissing Peo Holdings, a private equity owned by De Beers for doing little in helping Small to Medium Scale Enterprises (SMEs) in Botswana and alleviates Batswana from poverty.

“Peo Holdings should spend more money of SMEs,” argued van Wyk.

“We insist that the marriage of De Beers and government of Botswana is not a healthy one. De Beers has revealed that when mining ends, it will not have a relationship after that,” he said.

Some of Peo milestones include 60 businesses funded, 1362 jobs created, which is a sixth of the jobs created by the largest private sector employer.

Peo is a private equity fund created by De Beers and Debswana in 1997.

De Beers spokesperson based in London, James Suzman, explained that Benck Marks Foundation missed the point on how the relationship between De Beers and Botswana had helped alleviate poverty.

“The report raises the issue of poverty, we are engaging with government and these are being addressed,” he observed.

Suzman stated that it must remembered that Botswana was one of the poorest countries at independence and now the country is ‘independent of foreign aid’.

“That is why Bill Clinton and the World Bank single it out,” he added, stating that Botswana has governance second to none.

De Beers is also of the view that taking into account dividends from their 50 percent shareholding in Botswana, and additional revenues generated through royalties and taxation, government and Batswana are primary beneficiaries of diamond mining in Botswana.


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