Thursday, April 24, 2025

Has Botswana honoured its obligations in the De Beers relocation agreement?

For the last five years, entrepreneurs have been consistently advised to brace themselves for the relocation of the De Beers diamond trading arm from London to Gaborone.

Business people were told that the relocation posited many opportunities, not least because the relocation of the business was going to see a Multi-billion dollar business being run from Gaborone.

Among those things mentioned were security services, banking, transport service, rental, hotel and restaurants.

Botswana, it was said at the time, was going to be host to top tier international business people who, as a result of the relocation from London to Gaborone, will be frequenting Gaborone to buy diamonds.

This was, of course, over and above hundreds of technical staff that De Beers would have to relocate from London to Gaborone.

The jury is still out on just how much Botswana business people heeded the call to prepare themselves.

While the relocation is still ongoing, it is also important to know if there have been targeted attempts by those in positions of authority to make sure that Botswana based businesses were beneficiaries of the relocation.

But what is more important, especially at this stage, is for us as a country to assess ourselves to determine if we have honoured our side of the bargain in as far as relocation was concerned.
As per the agreement between Botswana government and De Beers, the relocation from London put explicit obligations on either party.

These obligations had a very clear time table which had to be honoured if the relocation was to be a success.

We cannot emphasise strong enough the sensitivity of the relocation itself from London to Gaborone.
For over hundred years, De Beers has always traded its diamonds from London, which is a global financial hub with a well developed network of all supporting infrastructure that the diamond dealers had over the years grown to expect but also to take for granted.

Gaborone does not have such infrastructure.

As we speak, the Sir Seretse Khama International Airport expansion has been suspended.
Construction was supposed to have been completed in 2010.

Consistently, those involved in the relocation have raised absence of direct flights linking Gaborone to major cities in Europe, America, Middle East, China, India and Japan.

The fact of the matter is that travel, comfort and convenience are big issues for people who have money to buy diamonds from Botswana.

If somehow they feel that their travel to Botswana is very much an inconvenience as there are too many hassles, including but not limited to having to connect their flight, such people will simply move elsewhere.
Botswana is not the only diamond hub in the world.

It certainly is not the most advanced when it comes to supporting infrastructure and services.
Another issue that has been raised as of crucial importance is the banking services.

We note that many of our banks are moving in the direction of putting units within them specifically dedicated to servicing the diamond sector.
This is very welcome.
But it is far from being enough.

Service within our banks, including those that are said to be top tier banks, remain far below minimum standards at international level.

And we want to stress that the people who will be seeking assistance in those diamond units are top business people who are used to the shortest turnaround times, not to mention excellence when it comes to service.
Then there is an issue of safety and security.

There used to be a time when our politicians liked to boast that Botswana was among the safest places on earth.

We note that over the years that rhetoric has drastically subsided; and it has not been for no reason.

Political and economic developments in our neighbouring countries have had a spillover effect in our capacity to maintain the high levels of safety and security that we used to take for granted.
Our security services, we have to be candid, have often been found to be wanting in many areas, including training, but also just the handling of their customers.

The relocation of De Beers from London to Gaborone will attract many people and many characters, some of whom with the most dubious intentions imaginable.

While security of diamonds is of paramount importance, the safety of those who, for one reason or another, come here because Botswana is a world diamond hub, should also be addressed.

We need not emphasise that business people coming here primarily to buy rough diamonds may also end up as tourists somewhere.

While their capacities may vary, one thing they will want to retain constancy of is their own safety, that of their colleagues, friends and/or families.

Reports of difficulties surrounding the country’s education system cannot be a bonus for the country, even, as it is to be expected, that a majority of those relocating will be sending their children to private schools.

It was never going to be easy relocating from London to Gaborone, an important economic sector like diamond often associated with power, elegance, prestige, entitlement and privilege.
But it is our view that we can do better than has so far been the case.

RELATED STORIES

Read this week's paper