Botswana and its southern African neighbours, long dependent on diamonds for economic prosperity, are now scrambling to diversify as cheaper lab-grown stones threaten their foundations of growth.
To begin with, Botswana has taken the lead by launching a new sovereign wealth fund this week. Officials say it will serve as the “foundation for a more resilient, sustainable and diversified future beyond diamonds.” Moreover, the country is exploring several other avenues, including expanding luxury wildlife tourism, investing in the medicinal cannabis market, and harnessing its abundant sunshine to develop solar power.
Additionally, President Duma Boko has floated the idea of increasing the state’s stake in diamond giant De Beers and even selling Botswana’s diamonds independently. Such moves, he believes, could help secure greater returns for the nation.
Meanwhile, experts warn that it is not just Botswana at risk. “Countries such as Angola, Namibia and South Africa are all exposed but not to the same degree as Botswana,” noted Brendon Verster, an economist at Oxford Economics Africa.
According to the International Monetary Fund, diamonds remain central to Botswana’s economy, making up about 30 percent of its GDP and 80 percent of its exports. However, consumer preferences are shifting rapidly. As buyers increasingly turn to cheaper lab-grown diamonds produced in China and India, global diamond prices have suffered.
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