Saleshando is demanding the cost and funding terms of Botswana’s proposed bigger De Beers stake, warning that national development priorities could suffer.
BONGANI MALUNGA
Parliament is preparing to put the government’s proposed increase of Botswana’s stake in De Beers under the microscope, with Leader of Opposition Dumelang Saleshando demanding clarity on how the country will finance the potentially costly acquisition.
President Duma Boko announced during Monday’s State of the Nation Address (SONA) that Botswana intends to double its shareholding in De Beers from 15 percent to 30 percent, a move that would make the country the diamond giant’s single largest shareholder. Botswana has backed the Global Diamond Consortium as its preferred bidder for Anglo American’s 85 percent interest in De Beers.
However, the announcement did not disclose how much Botswana will pay for the additional stake or how its portion of the transaction will be financed. International reports on the proposed transaction have similarly noted that Botswana’s funding arrangements have not yet been disclosed. That unanswered question is now set to follow the deal into Parliament.
Funding Questions
Speaking in a post-SONA reaction, Saleshando said legislators will demand the finer financial details of the acquisition, particularly whether the transaction will place additional pressure on the national budget at a time when constituencies are competing for limited development resources.
“We have been wondering how this development would pan out but we want to establish the source of funds for such a transaction. This is not something that will be handed to us on a platter, funds are involved. We have heard of assistance from Middle Eastern countries in the acquisition of an increased stake but how much of that portion is truly ours after the transaction,” Saleshando asserted.
“It’s still early days but Parliament will seek answers on the whole acquisition process and how the funds were sourced. Can we truly afford this transaction? What will that mean for the average Motswana in Ngamiland in terms of our constituency projects, will this affect the national budget,” the opposition leader added.
Budget Exposure
The scrutiny also places the government’s own stated financing principles under examination. Boko told Parliament that advisors assessing the De Beers transaction had been instructed to consider financial prudence, fair risk-sharing and, crucially, limiting the call on public finances. The government has also assembled financial, legal, technical, tax and diamond valuation advisors to guide negotiations.
The President has argued that the enlarged stake will give Botswana greater influence over a company whose fortunes remain deeply intertwined with the country’s economy.
The Botswana Gazette sought comment from the Botswana Government Communications and Information System (BGCIS) on the financing of the proposed increase in Botswana’s De Beers shareholding but no response had been received by the time of publication.
This publication asked the government to disclose the estimated cost of acquiring the additional 15 percent stake and how that valuation was determined, identify the source of funding for the transaction and clarify whether financing had already been secured. The Gazette also sought details on any financiers involved and the key terms or conditions attached to the funding arrangement.