Botswana Mining Review Comprehensive Coverage of the Progress and Achievements in the Mining Sector
Related Articles
In a decisive move to reshape Botswana’s diamond-dependent economy, President Duma Boko has announced an ambitious plan to develop new industries, dismantle the state power utility, and increase concessional borrowing. This strategy aims to address the nation’s high unemployment rate and attract private investment, steering the country towards a more diversified and sustainable economic future.
Botswana, a nation of 2.5 million people, relies heavily on gems mined by Debswana—a joint venture between Anglo-American’s De Beers unit and the government—which account for 80% of its economy. However, these gems have not generated enough jobs, posing a risk of instability. Despite being mainland Africa’s richest country relative to its population size, Botswana faces significant economic challenges.
President Boko, a Harvard-educated human rights lawyer, achieved a historic victory in October by unseating the party that had ruled for nearly six decades. His campaign, which focused on economic reform, resonated with citizens grappling with declining living standards and high unemployment rates. More than one in four people in Botswana are unemployed, with the majority being young people—a situation Boko describes as a “huge risk.”
The election took place against the backdrop of a prolonged downturn in the diamond market, which stymied economic output and led to widening budget deficits. Boko’s Umbrella for Democratic Change coalition won 36 seats in the 61-seat legislature, while the Botswana Democratic Party, which had ruled since independence from the UK in 1966, was reduced to just four seats. Former President Mokgweetsi Masisi was denied a second term.
Boko emphasized the need to steer the country in a new direction, aligning with the populace’s vision for the future. Botswana boasts an annual per-capita income of $7,820, higher than that of oil-rich Gabon and South Africa, the continent’s biggest economy. However, the country has made limited progress in reducing its reliance on mineral extraction and creating employment opportunities.
To ensure economic stability, Boko has swiftly moved to cement a new long-term deal with De Beers. He is also focused on developing “climate-smart” agriculture, expanding the digital economy, and promoting local mineral processing to avoid exporting raw ore. Another priority is to reduce Botswana’s reliance on coal for electricity generation and increase the output of renewable power.
“We are going to be actively developing our solar-energy capabilities,” Boko said, with plans for solar technology to supply half of Botswana’s energy needs by 2030. Although the country ordered a new coal-fired power plant from Jindal Steel & Power Ltd. in 2022, Boko sees it as unlikely that any more will be commissioned.
Botswana’s low debt-to-GDP ratio positions it well to borrow more for development programs. Boko has engaged in talks with the World Bank and the African Development Bank, highlighting untapped opportunities for the nation. He plans to press ahead with a long-mooted plan to unbundle the loss-making Botswana Power Corp. into generation, transmission, and distribution units, inviting private investors to participate in the transmission sector.
“There has been a change of guard,” Boko said. “We trust we will see growth.”
Boko’s bold initiatives mark a significant shift from previous administrations, aiming to steer Botswana towards a more diversified and sustainable economic future. His vision reflects a commitment to addressing the country’s economic challenges and creating a more prosperous and stable nation for all its citizens.
