Once championed as Botswana’s next step in economic sovereignty, the De Beers acquisition has quietly disappeared from policy plans — replaced by silence, numbers, and caution.
By DOUGLAS RASBASH
THE VANISHING CONSENSUS
Barely six months ago, Botswana seemed poised to take a 36 percent stake in De Beers from Anglo American — a bold, nation-defining move framed as economic sovereignty, value capture, and a continuation of the “diamonds for development” story. Yet that certainty has quietly dissolved.
The recently released National Development Plan 12 (NDP 12) makes no mention whatsoever of the De Beers acquisition, despite its fiscal magnitude — a transaction worth nearly USD 4 billion, equivalent to roughly a quarter of GDP. Nor was it discussed in the Mining Sector Presentation to Parliament, which instead highlighted energy transition, manufacturing diversification, and private-sector innovation.
The omission speaks volumes. Political and public opinion have shifted from ambition to prudence. Botswana’s long-term success with Debswana has bred understandable confidence, but even national icons must now be tested against data, not nostalgia.
THE ECONOMIC QUESTION
At face value, the argument for buying De Beers was seductive: greater control over downstream sales, larger dividend inflows, and strategic autonomy in a changing global market. Advocates compared it to resource nationalism seen elsewhere in Africa.
But the macro-economic arithmetic never added up. The purchase would require USD 4 billion in new borrowing, pushing Botswana’s debt-to-GDP ratio above 55 percent — the highest in the nation’s history. Interest costs alone would exceed BWP 3 billion per year, while the government’s development budget already runs at capacity.
Moreover, De Beers’ revenues are cyclical, its margins thin, and its balance sheet exposed to falling natural-diamond prices and the surge of lab-grown stones. When analysts treated the acquisition as an investment case rather than a political statement, the outcome became starkly evident.
THE MONTE CARLO SIMULATION
To separate signal from sentiment, a Monte Carlo Simulation (MCS) was run using 10 000 iterations of key variables — global diamond demand, rough-to-polished price spreads, exchange-rate volatility, and financing costs. Each run generated a Net Present Value (NPV) and Internal Rate of Return (IRR) for the proposed investment.
The results showed no scenario providing a positive net present value to the economy. Moreover, the investment would not generate any new jobs — the acid test for NDP 12 investments.
In simple terms, there is no statistical scenario under which the acquisition produces a positive economic return. The volatility of diamond prices, currency risk from USD financing, and the opportunity cost of tying up scarce public capital all outweigh any potential benefit. Even in the top-decile scenarios, the best outcomes remain negative.
The analysis treats De Beers not as a mythic institution but as a leveraged multinational competing in a structurally changing market. Lab-grown diamonds now capture nearly 20 percent of global retail value, and technological substitution is accelerating faster than De Beers’ capacity to reinvent its brand narrative.
THE SHIFT IN POLICY AND OPINION
Until mid-2024, political momentum for the purchase was visible: statements from senior officials, working groups, and speculative valuations. By late 2025, however, that consensus has unraveled. Three signals confirm the shift.
First, NDP 12’s silence. Neither Part I nor the accompanying mining presentation mentions the acquisition — a deliberate omission from a document that details everything from cattle inventories to gigawatt targets.
Second, institutional caution. The IMF Article IV (2025) commended Botswana’s diamond management but warned that “large equity purchases in cyclical sectors could elevate debt vulnerabilities.”
Third, domestic realism. Business Botswana, opposition parties, and several senior economists have argued that diversification, not concentration, should define the next phase of growth.
Together these signals amount to a policy retreat by omission. The political economy has caught up with the data: even a symbolic acquisition cannot survive a negative-value proposition.
LESSONS FROM THE NUMBERS
Good economics is often about restraint — knowing what not to do. The De Beers case demonstrates that national pride and economic prudence are not the same thing. The temptation to “own the legend” collides with the discipline of fiscal arithmetic.
By rejecting or deferring the purchase, Botswana preserves fiscal stability, avoiding a 10-point debt spike; investment flexibility, freeing billions for diversification in energy, tourism, and infrastructure; and strategic leverage, maintaining a partnership with De Beers without assuming its liabilities.
OWNERSHIP CARRIES LIABILITIES AND RISKS
A majority stake means that both profit and losses are shared. Last year De Beers made a loss of USD 25 million, which means that its owners — Anglo American (85 percent) and the Government of Botswana (15 percent) — must ensure that losses are financed, since it is not a public company.
With a much larger stake comes much larger liabilities. Is this really understood? The Monte Carlo Simulation closes the debate: under any plausible market path, the acquisition destroys value.
There is zero probability of economic gain — only risk transfer from a fading global miner to a prudent African state. History may still judge Botswana’s diamond story as visionary, not because it bought more, but because it knew when to stop. In this, the government’s quiet retreat is not weakness but wisdom. The numbers spoke, and for once, policy listened.
Infographic Statistics
USD 4 billion — Value of the proposed De Beers acquisition.
25 percent — Share of GDP represented by the deal.
55 percent — Projected debt-to-GDP ratio if purchase proceeded.
BWP 3 billion — Annual interest cost estimate.
10 000 — Monte Carlo simulation iterations run.
0 percent — Probability of positive economic return.
20 percent — Global diamond retail value now held by lab-grown stones.
USD 25 million — De Beers’ loss in the previous year.
36 percent — Stake Botswana intended to acquire from Anglo American.
P388 billion — Total NDP 12 spend, with no provision for the De Beers deal.