Diamonds to development: Botswana’s post-independence economic growth

At independence, Botswana was amongst the world’s poorest countries. Today, it is one of the fastest-growing and most stable economies in Africa. How did the country become so rich and benefit from its natural resources in a way other African nations were unable to?

This transformation can be understood by first examining the country’s colonial history. Following their defeat in the Anglo-Boer War, the British established the Bechuanaland Protectorate in 1885. This provided them a strategic link between Central and Southern Africa. Because British interests in Bechuanaland were focused on this strategic goal, rather than economic extraction, colonial interference was less severe than in other African countries. The British used a system of indirect rule. Indigenous institutions and traditional chiefs formed the basis of administration.

The country had poor infrastructure, with only 12 kilometres of paved roads, and low education levels. 

At independence in 1966, Bechuanaland became the Republic of Botswana. The country had poor infrastructure, with only 12 kilometres of paved roads, and low education levels. The country had just 22 university graduates, 100 with secondary education, and 72.7% of citizens over 25 did not have formal schooling in 1965. Botswana was amongst the world’s poorest countries by GDP per capita, with nearly half of its budget reliant on British aid. The economy was dominated by livestock, which made up over 90% of exports, but generated little profit.

In 1967, De Beers geologists discovered Orapa, which would become the world’s largest open-pit diamond mine. De Beers held a near-global monopoly, so Botswana’s government built a productive partnership by founding Debswana, a joint venture owned by the government and De Beers. The Diamond Trading Company’s ownership was also split equally.

From 1965 to 1995, Botswana had the world’s fastest economic growth, catalysed by the Orapa mine. Diamond profits helped maintain low public debt, emergency funds, and a low tax rate. Revenue funded healthcare, education, and infrastructure. Learning was expanded by free primary and secondary education, a university, scholarships for study abroad, and vocational training. Health spending built clinics, regional hospitals, and Africa’s first free public antiretroviral initiative, reducing HIV/AIDS mortality and boosting life expectancy. Today, diamond mining forms a third of GDP, half of public spending, and 80% of exports.

Unlike many developing nations, Botswana avoided the “resource curse,” where mineral-rich countries suffer high poverty and slow growth. The government enforced strict anti-corruption measures to ensure diamond revenues were managed transparently and reinvested in public services. The Corruption Perceptions Index ranks Botswana as Africa’s least corrupt country.

In June 2023, De Beers and Botswana’s government agreed to extend Debswana’s rough diamond production to 2033 and its mining licence to 2053. A joint statement noted the deal would create “tens of thousands of new jobs,” both through a larger diamond industry and new sectors, focusing on developing a knowledge-based economy.

This industry partnership continues to be a major source of employment. Debswana employs about 6,300 people, 93% of whom are local Batswana. DTC Botswana, the sorting and marketing arm of De Beers, employs around 500 skilled diamond sorters and salespeople, most of whom are citizens.

However, underdevelopment in other sectors has led to high wealth inequality and unemployment, which reached 27.6% in early 2024. Climate shocks, like severe droughts, threaten livelihoods and deepen poverty. Despite rapid growth, these challenges show the need for diversification to reduce reliance on diamonds, and build resilience.