MASISI MUST GET MORE FROM DE BEERS
After his victory at the just ended general elections, President Mokgweetsi Masisi’s mandate is to simply accelerate economic development, ensure peace and security, dignity for Batswana as well as promote democracy to mention but a few.
All these come at a cost. Government needs money to service land and be able to allocate plots to its citizenry. The land applications backlog, that goes as far back as ten years exceeds 300 000. Further, more money is needed to industrialise and diversify the economy and create employment for Batswana. In a population of just above 2 million, only 350 000 Batswana are formally employed (although some numbers are from Ipelegeng workers). Annually about 20 000 tertiary graduates are produced. Statistics show that only 2000 out of those get employed. This is a sign that the economy is not doing very well. Botswana’s economy is reliant on diamonds, meaning that diamonds are Botswana’s most valuable commodity. It is in this regard that President Masisi must ensure that while efforts to diversify are ongoing, we must in the meantime maximise value from the diamond.
De Deers’ ten year sales agreement with Botswana expires in 2020, but the mining licenses for Jwaneng Mine, Orapa, Letlhakane and Damtshaa mines all expire in 2029. President Masisi’s administration is in negotiations with De Beers pending the renewal of the contract. Former President Festus Mogae tried his best in getting the Diamond Trading Company (DTC) to relocate to Botswana from the United Kingdom (UK) in a quest to promote beneficiation. Little has been achieved so far.
A 2017 report by the Natural Resource Governance Institute ranked Botswana 68 out of 89 in value realization, with a score of 40 out of 100 points, arguing that the country’s weakest point is value realization. Additionally, “the government does not require the disclosure of ultimate beneficial owners of extractive projects and public official interests in extractive project-important anti-corruption protections”.
President Masisi must change all that. Financials must be fully disclosed to government. Further it emerges that over P7 billion is disbursed by De Beers Botswana in procurement budget. More than half of that money goes abroad. Government must ensure that 100 percent citizen owned companies control that budget not the satellite offices of foreign owned businesses. The more the value remains in Botswana, the more the money circulation, hence economic opportunities increase. Government will also be able to make more in taxes and be able to service land and finance other projects. De Beers events, the diamond conference for example was dominated by South African companies, which made a one-off killing. After more than five decades of diamond mining, Batswana should be at the forefront and not at the backseat. When renewing the sales contract, President Masisi should selfishly protect the interests of his fellow citizens and ensure that they get rich from the diamond proceeds.