Lets be clear about the diamond deals
In last week’s edition we published an article titled The Diamond Deception which pointed out key factors of the secrecy in the relationship between De Beers and the diamond trade that the Botswana government deal’s structure with De Beers is complex , confidential and manipulative and has since opened for amongst other things, tax evasion.
The debate may be as old as time, in the history of Botswana diamond industry and media reports, but what seems to spark great fretfulness is the government’s idealism to the effect that these secretive agreements we have became party to for decades, have opened up for manipulation and tax evasion that bleeds our economy billions of pula while poverty remains a growing concern.
Recently reports have been that the BCL mine, which is solely Botswana government owned, is in dire financial challenges leading to bad economic performance owing to sliding nickel prices globally and some of it poor management and lack of diversification. We are at the brink of losing the nickel mines and the ripple effect of this is that unemployment figures will catapult while the mining town of Selibe Phikwe is beckoning at a very gloomy future.
First and foremost diversification of the economy will require transparency, focus, and the political will, both in how De Beers and BCL operate.
Currently not a significant number of Batswana are key players in the diamond-mining sector that has been monopolized by the conglomerate, De Beers for decades. Should small time miners be allowed to play a part in commercial mining a lot could be achieved in terms of opening up the economy and direct beneficiation to small Batswana entrepreneurs. This will need a strong political fortitude to explore and implement, the framework should also be crafted to protect local miners while also seeking to have access into regional and global markets.
Reports have been that we are so rich in gas its like the country is sitting on a landmine, this has not yet been tapped into. It is already evident that from the onset, at the prospecting stages, multinational companies dominated the race for gas mining licenses while Batswana were being kept on the sidelines as spectators. The contracts have not been entirely transparent such as the reports that some gas mining companies have ties to the ruling elites, the citizens of this country still walk out empty handed while Canadian connected miners sustain their fat pockets.
The failure by government to ensure that Batswana get meaningful opportunities in the economic sectors has bred seemingly inexorable corruption from civil servants, the private sector and our hungry politicians. This has also bred a negative boomerang effect on our country governance and provision of resources to the mere citizen at the bottom of this vigorous food chain. The rich get richer while the poor get poorer and patronized from speaking against corrupt elites.
Socially, if the psyche of the average Motswana is taken care of, and we all have this moral right to live without corruption, then Botswana will prosper far much better than what a few selfish and ignorant individuals can fathom.
Up to now, no official transparent report exists about how much diamonds have been mined since the 60’s, their value, every individual stone and the faces behind the dealers, the buyers and the notorious tax havens in which these deals are made and the cash stashed. Tax agents would also tell you that they are not allowed to interrogate Debswana’s books nor the diamond price books and the agreements between De Beers and its sight holders. They will tell you that all they know is that Debswana does pay taxes but cannot quantify if they are paying the real value of the profits they made from the stones they sold.
While the romance between De Beers and government and the ruling BDP has been inseparably symbiotic and one of the longest PPPs in the world this leaves a challenging factor such as where and when does ruling government draw the line between self business interests, political interests and the welfare of the country citizens as far as socio-economic welfare is concerned. This secrecy has seen De Beers buying in and out Presidents, legislator meaning our democracy has been price tagged by a minority rich gang while the details of these agreements remain unknown, its clear that both parties are sworn to secrecy.
The dangers of these become evident when in the largest diamond mining town of the world, Jwaneng, children are subjected to extreme poverty and segregation because the elitist government has failed to provide state of the art health, education and recreational facilities. The billions are in a bank account of a faceless individual with a crooked name in Panama and Luxembourg.
Transparency, focus, and the political will, those three things are essential and by the time we do that we would be up close to what Scandinavian countries do.