Botswana has secured an initial BWP1 billion ($75 million) contribution from De Beers to help build industries beyond diamonds, giving the country a new investment vehicle as falling natural-diamond demand exposes the risks of relying on a single commodity.

The funding marks a step in Botswana’s effort to turn decades of diamond wealth into a broader industrial base, with investments intended to support export competitiveness, enterprise development and employment. The independently governed Diamonds for Development Fund is designed to attract additional capital from domestic institutions, international investors and private-sector partners.

The initiative carries particular weight as pressure on the diamond market squeezes government revenue and forces Botswana to accelerate efforts to develop alternative sources of economic growth. The initial contribution provides seed capital, but the fund’s wider impact will depend on its ability to attract investors and finance commercially viable businesses.

Diamond dependence faces a tougher test

Diamonds have historically generated about 80% of Botswana’s export earnings, one-third of government revenue and roughly one-quarter of gross domestic product, according to the International Monetary Fund.

Since independence in 1966, the country has used diamond income to finance infrastructure, education and healthcare, establishing one of Africa’s most prominent resource-led development stories.

However, weaker natural-diamond demand, competition from laboratory-grown stones and economic uncertainty in major consumer markets have exposed the vulnerability of that model.

Botswana is now seeking growth opportunities in tourism, agriculture, manufacturing, renewable energy, technology and other mineral industries. Diversifying into these sectors could reduce its exposure to diamond-market downturns while creating new sources of exports, investment and jobs.

Fund targets industrial investment

The government and De Beers announced the BWP1 billion ($75 million) transfer on Wednesday, providing the initial capital for the fund to finalise its investment strategy and begin programmes in selected sectors. The $75 million figure reflects the approximate dollar value attached to the commitment when the broader agreement was announced; the actual transfer was denominated in Botswana pula.

De Beers has also committed to further annual contributions from dividends it receives from Debswana, subject to the mining company’s performance. Debswana, jointly owned by Botswana and De Beers, operates some of the country’s most important diamond mines and has long been a major source of government revenue and foreign exchange.

Minerals and energy minister Bogolo Kenewendo said the fund would help convert diamond wealth into new industries, quality jobs and broader economic opportunities for Batswana.

Former African Development Bank president Akinwumi Adesina chairs the fund. He said the initial contribution marked an important milestone, allowing the organisation to move towards implementing its diversification, industrialisation, export and employment objectives.

De Beers ownership adds strategic stakes

The funding arrives as De Beers faces a potential change in ownership. Anglo American, which holds an 85% stake in the diamond producer, is seeking to sell its interest as part of a wider restructuring. Botswana owns the remaining 15%.

De Beers reported a $787 million loss last year on revenue of nearly $3.5 billion, reflecting continued weakness in the natural-diamond market. A consortium led by former De Beers chief executive Gareth Penny is among the potential buyers, while Swiss luxury group Richemont, controlled by South African billionaire Johann Rupert, has reportedly considered joining the consortium.

Botswana is also reportedly negotiating to increase its De Beers stake to about 25%, although no completed transaction has been announced.

The fund therefore represents a parallel strategy: Botswana is exploring a larger role in the diamond company while building economic capacity beyond the sector. Its long-term success will depend on whether the initial BWP1 billion ($75 million) attracts additional investment and supports productive businesses capable of competing without permanent reliance on diamond revenues.