The question remains: can Botswana adapt to this seismic shift and emerge stronger in the face of its changing fortune?
DOUGLAS RASBASH
Special Correspondent
De Beers prospectors Gavin Lamont and Manfred Marx discovered diamonds in Botswana. The rest is history. DeBeers set up Orapa and Jwaneng mines and the diamond industry. Diamonds have been the predominant source of income for 40 years.
The country has benefitted significantly from its mineral good fortune, catapulting it from being one of the poorest at independence, at one stage, the fastest developing in the entire world. But this has all changed because the mono-culture economic model that Botswana adopted has passed its sell-by date.
Diamonds can no longer be relied on to support the economy and the people. The demand for natural diamonds has fallen and traded places with lab grown diamonds, with the synthetics commanding 22% of gem quality diamonds and 67% of industrial diamonds being sold.
Whether or not people are fearful of sounding unpatriotic, the market tipping has arrived from which there will be no turning back.
The tipping point market theory is well tested. A market tipping point is the critical threshold at which a product, service, or trend shifts from niche adoption to mainstream acceptance.
At this point, market forces accelerate adoption rapidly, often making the change irreversible. The concept is commonly used in technology adoption, renewable energy transitions and consumer behaviour shifts.
Tipping Point Percentage
The tipping point typically occurs when 15-20% of the market adopts a product or behaviour. This is based on diffusion of innovation theory, where early adopters and the early majority together create enough momentum for widespread adoption.
- Below 10%: Adoption is slow, driven by innovators and early adopters. Market awareness is growing but remains niche.
- 15-20%: The tipping point – adoption accelerates, social proof strengthens, and barriers to entry decline.
- Above 50%: The product or service becomes dominant, and laggards eventually follow.
Examples of Market Tipping Points
- Electric Vehicles (EVs): Countries like Norway surpassed the 20% tipping point years ago, leading to exponential EV adoption.
- Smartphones: Once adoption crossed 20%, feature phones rapidly disappeared.
- Streaming Services: Netflix and others hit the tipping point around 2015, leading to the decline of cable TV.
More details of tipping point theory can be found in ps://www.bain.com/insights/tipping-points-when-to-bet-on-new-technologies/).
The growth in LGDs is about 9.6 % pa according to https://www.alliedmarketresearch.com/lab-grown-diamonds-market-A13694?utm. If the trend continues, then by 2036 the share of the diamond market taken by natural diamonds will be 54%. Other commentators such as Paul Ziminsky predict that will be reached in 2025.
Whatever the source, Botswana’s GDP will contract by at least 13 %. Per capita GDP will fall from $7,239 to $6,289 – https://www.thegazette.news/features/illusions-of-wealth-behind-the-smokescreen-of-economic-statistics/. Any scenario that assumes a growth in our economy based on increased diamond revenue would be circumspect. We need to be aware that growth can only be driven by other sectors and industries.
Growth scenarios must assume new sources of income – not only those from agriculture tourism and more mining. The impact of the diamond tipping point has long been awaited – and with justifiable trepidation.
The tipping point does not only apply to the diamond market but also to Botswana. The old Botswana must give way to the new. As the industry declines, Botswana’s economic model – once centred around its glittering mines – is quickly becoming obsolete.
Growth now hinges on diversifying into new and emerging sectors beyond agriculture, tourism, and mining. The country must look towards innovative industries such as technology, manufacturing, renewable energy, and digital services to secure sustainable growth.
The time has come for Botswana to embrace change, with bold investments in new industries that can drive economic expansion and create new avenues for prosperity. The tipping point for the diamond market is not just a shift in global trends; it is a call for Botswana to redefine its future.
The old Botswana, glittering in diamond-driven prosperity, must now give way to a new era; one that builds on resilience and reinvention. The question remains: can Botswana adapt to this seismic shift and emerge stronger in the face of its changing fortune?