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Botswana Looks To Diversify Past Diamonds for Future Economy

September 29, 2016 at 04:26 pm | Money Moves

Fredrick Ngugi

Fredrick Ngugi | Contributor

September 29, 2016 at 04:26 pm | Money Moves

Botswana diamond factory workers sorting diamond pieces. All Africa

As the world’s largest diamond producer and arguably one of Africa’s richest and most stable countries, Botswana has benefited a great deal from diamond mining, with its per capita income rising 13-fold over the last few years, according to Reuters.

The South African nation currently enjoys more than 7,000 kilometers of road network and its government’s credit rating is the highest in Africa, according to the World Bank.

“It’s chalk and cheese when you compare what the country looked like back then to what it is now,” Botswana President Ian Khama said.

But as the country marks its 50th anniversary, a cloud of uncertainty is slowly settling in as Batswanas come to terms with the fact that their main source of revenue is gradually diminishing and the rapid growth they experienced over the past years likely won’t be replicated.

“There is no immediate threat to Botswana’s current ‘business model,’ but diamond mining is unlikely to provide economic growth in the future,”Keith Jefferis, an economist based in Gaborone, Botswana’s capital, says.

Shifting Focus

In its attempt to cushion the impending threat to its economy, the government of Botswana is slowly weaning its focus off of diamond mining as its main source of revenue.

Mining reportedly accounts for only one-fifth of Botswana’s GDP last year compared with half in the late-1980s.

The government is shifting its attention to financial and tourism sectors for revenue.

Although unemployment among young people still remains at 20 percent in Botswana, new banks and hotels are reportedly generating a sufficient number of jobs for a significant portion of the country’s growing population.

Advancements in mining technology and the discovery of more mining sites have pushed the predicted end of diamonds further, giving the government enough time to put its house in order by building other sectors of economy.

“Modern economies are propelled by people who have properly trained. One of the mistakes we made is not training people to be doers and creators. But I’m an optimist. We can easily fix that,” said David Magang, a local lawyer.

Although diamond has been Botswana’s main natural resource, it also produces several other precious minerals, including copper, gold, nickel, and soda ash.

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