by Dr Mpho Pheko

President Duma Boko has casually announced to the world that by the end of October, 2025, Botswana would have concluded a deal with Anglo American plc that would raise the country’ stake in De Beers to more than 50%, giving Botswana effective control of the mining conglomerate.

In an interview with CNN’s Richard Quest, he states the rationale for the acquisition thus “…to have effective control of the industry …our voice to be heard…economic sovereignty”. These are lofty reasons but they do not provide a business case for the planned acquisition.

As at February 2025, Anglo American had attached a book value of $4.1 billion to De Beers. It is reported, assuming this is Anglo’s asking price, Botswana will have to raise at least $1.476 billion, approximately P19.63 billion to acquire an extra 36% of the shareholding in De Beers.

It will need $3.485 billion or P46.34 billion to buy the entire 85% Anglo wants to offload. Even at the lower end of 36%, we are looking at a level of commitment to risk that the Botswana Congress Party is duty bound to oppose.

1. The investment is speculative and risky: Market trends suggest that the natural diamonds industry is facing high levels of risk and uncertainty. In particular, it is experiencing a structural shift in demand and stiff competition from lab-grown diamonds (LGDs) and shifts in consumer preferences towards LGDs, gold and other gemstones. It also faces internal structural challenges, including increasing costs of extraction and mine closures that undermine competitiveness. Technological progress guarantees further decline in the cost of producing LGDs, improvements in quality and growth in market share, which will make LGDs an even bigger competitive threat. The government’s September 2025 Macroeconomic Overview foresees weak demand for natural diamonds between 2025 and 2028. A responsible government will not risk billions on De Beers under current levels of industry risk and uncertainty.

• Fiscal recklessness: The state of the economy and the country’s fiscal position do not support the proposed transaction. It will have no immediate impact on economic growth, government revenue or employment. The government projects an economic decline/contraction of 0.4% in 2025. This means the economy will endure a second successive year of recession. The IMF projects an even sharper decline, one per cent (1%). The fiscal outlook is not good either. The Ministry of Finance projects large budget deficits up to 2028, with budget deficits of P24.7 billion and P22.1 billion in 2024/25 and 2025/26 (projected) respectively. Public debt has risen above 30% of GDP. It is common knowledge that the Government is struggling to honour its obligations, including salaries and payments to suppliers. Under the circumstances, the commitment of billions to the acquisition of De Beers would amount to an extreme act of fiscal recklessness. It will push Botswana to the fiscal cliff.

• The Opportunity cost of the acquisition: The acquisition of an additional 36% of De Beers shares will come at a huge opportunity cost to Batswana. Public health and public education are both crises. To acquire the quantum of De Beers shares required for a controlling stake, Botswana will have to sacrifice the health and lives of citizens and the education of their children. It will be comical, if not foolhardy, for a government that cannot buy medicines for its people and learning and teaching materials for its children to commit billions of Pula to a speculative high risk investment. The BCP will not trade the health and lives of Batswana, and the education of their children, for additional De Beers shares.

• Government Control of De Beers will hurt the company itself: Botswana does not have diamond industry specific knowledge assets necessary to make its control of De Beers count at any level of the value chain. As one industry commentator opined, it is one thing to assume control of your minerals, “It’s one thing to assert control over one’s natural resources, it’s completely another to turn a profit out of running a global corporation that De Beers is”. At best, Botswana will assume more ownership risk of De Beers without operational control. More probable, government ownership will erode the company’s operational efficiency, attractiveness to investors and profitability.

•  The acquisition is illegal: As of now, the President has not sought Parliament’s approval of this transaction, nor has it been given. The question then is: from whence did he get the authority to commit Botswana to the acquisition of a controlling stake in De Beers? This is yet another example of the President showing contempt for Botswana’s laws, its institutions and processes, and the people, and treating the country like his personal property. The Minister of Finance must explain to Batswana whether indeed the Government has negotiated the purchase of at least an additional 36% of De Beers shares and how he plans to pay for them.

• The deal is shifty: Responding to a question on how he will finance the acquisition, the President said a number of investors have been lined up. He specifically mentioned the Oman Social Wealth Fund. Is Oman providing credit or equity? If it is credit, the question of extreme fiscal recklessness arises. If it is equity, then Botswana will be no more than a front for the financiers, in which case two questions arise: a) What will be Botswana’s interest in the transaction; b) who stands to gain from it and how?   

We oppose this transaction. The President has not made a business case for it. It is too risky and too costly. It has been subjected to no appraisal or due diligence. It is illegal. It could bankrupt the country or reduce Botswana to the ignoble role of a front for third parties, including unscrupulous profiteers.

• Dr Mpho Pheko is Publicity Secretary for the Botswana Congress Party