A mere 5 hours drive from Joburg and yet, a visit to Botswana remains on my bucket list. Sigh. I wish I could have waited to visit before writing a blog about Botswana but I couldn’t wait. I’ve just returned from a workshop in Mauritius (yes, I live a hard life) on managing natural resources in Southern Africa. Many resource-rich countries like Angola (oil), Zambia (copper) Botswana (diamonds), South Africa (gold and platinum), attended. Parts of the workshop were quite technical and involved some modeling – projecting how much money a country can expect to make until the resources run out. Knowing how much money you have helps with long term planning. But, the most exciting part about the workshop was hearing countries sharing their own experiences. There was one “kid” in the class that was soooo good, he made everyone else look bad! Respect to the people of Botswana who are way ahead of the pack in terms of how they manage their natural resource wealth! So, here are five new things I learned about Botswana.
1. Botswana saves money for future generations
Botswana is aware that the diamonds will eventually run out. So much for Shirley Bassey’s song “diamonds are forever….” No, they are not! Botswana knows this and so it has set up a fund where they invest and save the money they make from diamond exports. This is held in a special fund, called the Pula Fund. Norway does the same with their oil money. A few other countries in Africa (e.g. Ghana, Nigeria, Mozambique, Zambia, Zimbabwe) are starting to do that as well. Its a great thing if a government really intends to save. Otherwise, a sovereign wealth fund, which isn’t well managed and audited, will just be a convenient way for politicians to enrich themselves. Botswana assures its citizens by auditing these funds annually and making the audit findings public.
2. Botswana owns its resources
In most African countries, the extractives industries are owned and operated by foreign companies. Some countries like Zambia attempted to nationalise their mines but in the end were pressured to privatise after making a series of losses. Botswana is the world’s leading producer of diamonds. Like its African counterparts, Botswana lacks the muscle that is needed to run such industries and therefore, the largest diamond mines are run by a South African company, called De Beers. However, unlike its counterparts, Botswana is an equal partner through a joint venture with De Beers. The company is now called “Debswana” (combining De Beers and Botswana in true power couple fashion… you know, like Branjelina and Kimye). During the workshop, the other countries kept asking Botswana, “how did you guys manage to negotiate 50%”? Their response: “well, it was a difficult process, but ultimately, these resources belong to our people and the companies need to understand that”.
3. Diamonds were only discovered after the British left
British colonialists must still be turning in their graves as diamonds were only discovered in Botswana AFTER the country received its independence. Ha! jokes’s on you, Great Britain! And we are talking diamonds that arent buried so deep in the ground. I intend to take a shovel with me when I visit 🙂 Anyway, this was a very fortunate occurence because Botswana’s narrative would have been completely different if the Brits had an inkling that precious stones were sitting under the ground while they were in charge.
4. Botswana has a very disciplined government
Good governance is Botswana’s trademark. We know this about the country. They have a well performing government that is transparent and manages its resources with excellence. But, it is also a country that lives well below its means. They have an expenditure rule that they stick to religiously. Not more than 40% of its GDP can be spent in any financial year. So, they spend up to 40% and save the rest.
5. The Batswana are forward thinkers
The country invests wisely in education and in infrastructure, both of which are a winning combination for economic development. Recently, they built a new dam that would be able to provide water for 30 years even if it didn’t rain a drop in those 30 years. That is how big the dam is. Let’s not forget that Botswana is semi-desert so water is potentially an issue. They’ve also built a long pipeline stretching 500km that connects the water from the dam to communities. It seemed rather excessive as I was listening to this but this country is not going to wait to get into problems before they start taking action. They are forward thinkers.
If you already knew these things about Botswana, then that’s fantastic. If you didnt know, now you do. I’m looking forward to visiting Botswana in the very near future to see friends, appreciate its natural beauty and enjoy their much talked about beef, which I hear has a unique flavour and taste.
Peace and Love!
Photo credit: reuters