In 2004 Botswana government sold its shares in Anglo American, a London Stock Exchange multi resource company that is among the biggest mining houses in the world.
The sale of the shares, at least based on an official statement was so that the country could finance its budget deficit.
It was a substantial stake, fetching $88 million at the time. Over the recent past, Anglo American has been making waves and news around the world.
This week the company wrote down the value of De Beers by around 3 billion US Dollars.
This is a big deal.
Anglo wants to spin off De Beers.
They will do it by either listing it or selling it off.
BHP, an Australian mining behemoth has made an offer to buy Anglo American. That offer has been refused by Anglo, saying it was substantially too low.
It looks like BHP will in future be coming back with a sweetened deal. But all those would not be of much interest to Botswana and Batswana were it not of the fact that Anglo American is the owner of De Beers, a company in which Botswana has a substantial stake – around 15 percent.
And Botswana Government is also a partner with De Beers where the two own 50/50 of Debswana.
For Botswana the stakes could hardly be higher. Diamonds are like the family mettle.
They are the mainstay of the country’s economy. Take away diamonds, and the entire edifice collapses.
BHP has in the past made clear its intentions that it is not interested in Anglo assets in South Africa.
These are mainly coal, iron and also platinum.
That would also apply to De Beers, the diamond division of Anglo.
As a result, Botswana has a vested interest in how the whole thing ends.
The only problem is that ultimately, Botswana will have a limited say on who buys De Beers.
In global business nothing is as straight forward as it seems.
There are too many fault-lines we need to learn to negotiate as a country.
We often use brazen language that has the potential to scare off more polished suitors.
And then we often attract the dogs of war to our shores such as those we are getting from the DRC as partners to our diamond industry.
We need to start projecting prudence in our dealings with international partners.
The best way to do that is to seek more influence and power, while also knowing and acknowledging our limitations. Diamonds need certainty.
Even more so today when there is also pressure from lab grown diamonds. But certainty is also needed by the economy of Botswana.
Botswana remains terribly exposed to the global diamonds market, determined largely by what happens in the United States, Europe, Japan and to a lesser extent China.
Again Botswana has no influence on what happens in those economies.
Not least today when growth has been suppressed and unemployment has reached unsustainable levels.
The country is going through an election year.
And politicians would like to have money to throw around.
The ongoing uncertainty makes that harder than ever.
It is all and good for us as a country to brag about our natural resources and point out that without Botswana there is no De Beers. But ultimately diamonds are just stones.
We need as a country to strive to use those stones to achieve an economy that is dynamic, resilient and diversified.
So far we have failed to achieve that.
Anything short of that is empty breast beating.
