Botswana has reached a pivotal agreement with De Beers, securing a new 10-year diamond sales deal through its joint venture, Debswana. The deal, announced on Tuesday after seven years of negotiations, grants the government an increasing share of diamond revenues.
Diamonds are crucial to Botswana’s economy, contributing to approximately 80% of exports and a quarter of its GDP, according to the International Monetary Fund (IMF). However, a downturn in diamond prices and demand has severely impacted the country’s economy. This economic strain was a central issue in last year’s elections, where the ruling party, in power for 58 years, was voted out, partly due to discontent over the country’s economic challenges linked to the diamond sector’s struggles.
This new agreement marks a crucial step for Botswana as it seeks to stabilize its economy and regain control over its valuable natural resources.
Source: Reuters, IMF
