Botswana is now weighing whether to take majority ownership of De Beers itself, as the mining giant’s parent company Anglo American moves to sell its stake, a decision due before a fourth-quarter 2026 deadline that could determine how much control the country gains over an industry increasingly undercut by laboratory-grown alternatives.
The stakes were laid bare last August, when President Duma Boko declared a public health emergency after government hospitals ran out of medicine, citing a medical supply chain collapse tied to a $75 million debt to suppliers. The proximate cause was a budget shortfall driven by collapsing diamond revenue; the underlying cause traces back to a shift in what an entire generation of consumers wants on their fingers when they get engaged.
For nearly sixty years, diamonds pulled from the Kalahari financed the roads, hospitals and universities that made Botswana a rare African development success story. When the country won independence from Britain in 1966, its GDP per capita stood at roughly $59, among the lowest in the world. A year later, De Beers geologists found diamonds at Orapa, and the government’s 50-50 joint venture with the company, Debswana, transformed the economy: per capita GDP reached $6,805 by 2021, and diamonds came to account for roughly a quarter of GDP, a third of fiscal revenue and 80 percent of exports.
That model assumed the world would keep paying a premium for scarcity. Laboratory-grown diamonds, chemically identical to mined stones, have eroded that premium instead. A one-carat lab-grown diamond that retailed for about $3,410 in 2020 cost roughly $855 by 2025, according to Statista, as production capacity, concentrated among Indian cutting firms, expanded more than 300 percent. Natural diamonds followed the price down, with one-carat mined stones falling from about $6,000 in 2021 to around $4,200 in 2025, per BriteCo. Lab-grown stones captured more than 45 percent of US engagement ring purchases by 2024, up from just 5.2 percent of jewelry sales in 2019.
The impact has shown up directly in Botswana’s economic data. Debswana cut production targets by 25 percent in 2024 and a further 40 percent in 2025 relative to 2023 levels, and announced plans to lay off 1,000 workers, roughly a fifth of its staff, in a country where unemployment already exceeds 27 percent. De Beers’ rough diamond sales fell from $6 billion in 2022 to $2.7 billion in 2024. The economy has swung sharply quarter to quarter: GDP contracted 5.3 percent in the first quarter of 2024, then grew 8.2 percent in the third quarter of 2025 on a jump in diamond trading, only to contract again by 5.4 percent in the fourth quarter as diamond production plunged 54.6 percent.
Boko’s government, in office since an October 2024 election that ended 58 years of single-party rule, has responded on two fronts. It renegotiated terms with De Beers, raising the state’s share of Debswana’s sales from 25 to 30 percent immediately, rising to 40 percent within five years and potentially 50-50 after that, in exchange for extending De Beers’ mining licenses 25 years, to 2054. It has also pushed to diversify into copper and uranium mining, agro-industry and regional trade, though tourism, its main non-mining hope, has held at around 5 percent of GDP for three decades, a small base to fill the hole left by an industry that once made up a quarter of the economy.
The International Monetary Fund has flagged the risk directly, warning in its 2024 Article IV consultation that Botswana’s dependence on diamonds could hurt long-term growth given falling reserves, synthetic competition and the effects of Dutch disease. The World Diamond Council has long cited Botswana as proof that a single-commodity economy can avoid the resource curse when institutions are strong and revenue is managed transparently. That case study isn’t being undone by corruption or mismanagement; it is being tested by a substitute product that barely existed at commercial scale a decade ago and now competes directly with the resource the entire model was built on.
