Botswana is preparing to seek a larger stake in De Beers as Anglo American moves to exit the diamond business, but the government has yet to decide how much it can afford to buy. Vice President and Finance Minister Ndaba Gaolathe said any holding would exceed Botswana’s current 15% interest.

The government is balancing that ambition against worsening public finances and a sharp downturn in the global diamond market. Gaolathe said Botswana could no longer spend freely on strategic assets, even though diamonds remain central to the economy and will continue to play a major role in its future.

De Beers faces reset

Anglo American, which owns 85% of De Beers, is seeking about $1 billion for its stake, according to people familiar with the matter. That valuation reflects the pressure facing the industry, where cheaper lab-grown diamonds and weaker Chinese demand have pushed natural-gem prices sharply lower in recent years.

The downturn has hit Botswana particularly hard. Diamonds have supported the economy since major deposits were discovered in 1967, but weaker sales have contributed to the country falling into recession. A consortium led by former De Beers CEO Gareth Penny has been selected as the preferred bidder for the company.

Botswana weighs its options

Gaolathe said the changing market requires Botswana to rethink how it partners with the diamond industry.

He argued that the traditional model for selling diamonds is no longer suited to current conditions, while the downturn has strengthened the case for building a broader and more resilient economy beyond mining.

That diversification push comes as the government works to strengthen tax collection, align spending with revenue, reduce waste and improve infrastructure project management.

Gaolathe expects the budget deficit to reach about 8% of gross domestic product this fiscal year, better than the previous 8.9% forecast.

Botswana aims to reduce the fiscal gap to between 4% and 5% of GDP within two to three years, limiting the room for a large De Beers investment.

The government therefore faces a balancing act: protecting its long-standing diamond interests while avoiding spending that could further strain public finances.