Category: Sunday Standard

The global diamond industry remains under severe pressure, with De Beers reporting another difficult six months as weak rough diamond demand, lower prices and intensifying competition from laboratory-grown stones continued to weigh on the world’s largest diamond producer. Yet, even as earnings remained in the red, the company struck a cautiously optimistic tone, pointing to the first signs that years of market disruption may finally be beginning to ease.

Presenting its half-year results, De Beers said the first half of 2026 was shaped by geopolitical tensions, macroeconomic uncertainty and structural changes within the diamond market. The war in the Middle East disrupted global trade routes, raised energy costs and dented consumer confidence, while uncertainty surrounding United States tariffs, synthetic diamonds and elevated midstream inventories suppressed rough diamond demand.

Revenue fell to US$1.6 billion from US$2.0 billion a year earlier, while the average realised price dropped to US$105 per carat from US$155. Despite increasing production by almost 50 percent to 14.9 million carats, De Beers posted a negative EBITDA of US$113 million, highlighting the disconnect between stronger output and subdued demand.

For Botswana, whose economy remains heavily dependent on diamonds, the update offers a mixed picture. The company said it is making ‘significant progress’ in implementing commitments arising from its new partnership agreements with the Botswana government.

De Beers Executive Vice-President for Diamond Trading, Paul Rowley, said there were encouraging signs emerging from key consumer markets.

‘We are starting to see some more encouraging signals as our actions gain traction,’ he said, citing stronger natural diamond demand among independent United States retailers, firmer polished prices and growing support for natural diamond marketing under the Luanda Accord. However, he warned that the war in the Middle East and competition from synthetic diamonds remain significant near-term headwinds.

The company also said Anglo American continues to make ‘meaningful progress’ in discussions with parties interested in acquiring its shareholding in De Beers, although the process remains commercially confidential.

Botswana is heading toward a future defined by worsening water shortages, rising competition for scarce supplies and mounting pressure on its economy unless urgent investments are made to strengthen water security, a new report warns.

The latest Econsult Botswana Review says the country, already among the world’s most water-scarce nations, will become increasingly vulnerable to climate change over the next 25 years, with higher temperatures, more frequent droughts and declining inflows into dams threatening livelihoods and economic growth.

‘As a semi-arid and water-scarce country, Botswana is one of the countries most exposed to the impact of climate change, notably heat, drought, water stress, and climate variability,’ the report says. The report warns that by 2050, climate models project ‘increased rainfall variability, the delayed onset of the rainy season, a shorter crop growing season, rising average temperatures, increased drought frequency, reduced water inflows to dams and reduced rangeland productivity.’

Those changes, it says, will undermine water security while intensifying competition among households, agriculture and mining which are three sectors that already place heavy demands on Botswana’s limited water resources. The report identifies ‘greater water demand’ and growing ‘competition among cities, mining and agriculture’ as one of the country’s most significant climate risks.

Econsult argues that safeguarding water supplies must become Botswana’s foremost adaptation priority. ‘Several assessments identify water as Botswana’s highest adaptation priority,’ the report says, urging greater investment in reservoirs, groundwater development, wastewater recycling, leak reduction and more efficient water use.

With nearly two-thirds of Botswana’s population living in urban areas, cities including Greater Gaborone, Francistown, Maun, Kanye, Molepolole and Palapye are expected to face hotter summers, rising electricity demand for cooling, worsening water shortages and more frequent flash flooding after intense rainfall events.

The report recommends urban greening, stronger water conservation standards for buildings, improved drainage systems and better protection of water infrastructure to help cities withstand climate shocks. Climate pressures also threaten Botswana’s tourism industry, with ecosystems such as the Okavango Delta, Chobe National Park and the Kalahari Desert facing increasing environmental stress.

While Botswana has already adopted a National Adaptation Plan Framework and other climate strategies, the report says the real test lies in implementation. ‘Botswana already has a National Adaptation Plan Framework and related climate strategies, but implementation and financing will be the main challenge through 2050,’ it says.

The report states that despite Botswana’s relatively strong governance, the country’s dependence on water, rain-fed livestock production and nature-based tourism leaves it highly exposed to climate shocks, making investment in water infrastructure and conservation critical to protecting future economic growth.

Botswana’s new Employment and Labour Relations Act risks attracting damaging international scrutiny unless lawmakers tighten provisions dealing with child labour, according to Botswana Chamber of Mines Chief Executive Officer Charles Siwawa.

Speaking during a panel discussion titled ‘Rights on Paper or Rights in Practice? Botswana’s Readiness to Enforce Fair Labour Standards under the New Employment and Labour Relations Act,’ Siwawa said the legislation generally posed little risk to the mining industry but warned that one section could undermine Botswana’s reputation in global markets.

‘The risk that I picked up, it’s a small risk. I don’t think it’s a major one,’ Siwawa said. ‘If you look at the section on child labour, to me, we probably need to rewrite that.’

Siwawa argued that while the Act prohibits child labour, it weakens that message by creating circumstances under which children may be employed in non-hazardous work. ‘You cannot legislate child labour. In other words, you are saying you want to employ children, because the perception internationally is going to be very difficult for you. You cannot get away from it,’ he said.

His remarks come as Botswana prepares to implement sweeping labour reforms aimed at strengthening workers’ rights and bringing domestic labour laws closer to international standards. For the country’s mining industry, which exports diamonds and minerals into markets where environmental, social and governance (ESG) standards are increasingly scrutinised, perceptions of labour practices carry significant commercial consequences.

He pointed to the Democratic Republic of Congo as an example of how allegations of child labour can overshadow an industry’s economic importance. ‘The Democratic Republic of Congo… is the largest producer of cobalt. But the challenge is the perception that they use child labour to produce that cobalt,’ he said.

Although he acknowledged that the drafters of the legislation may have had reasons for including the provision, Siwawa said Botswana should adopt a simpler and more unequivocal approach.

‘Maybe the proponents of that, or who authored that section, had a reason to go that route. But you cannot legislate child labour.’

Instead of allowing limited exceptions, he argued that the law should contain an absolute prohibition. ‘If we could only stop with Section 6(2), where it says, ‘No child labour.’ But not to then go on and say, ‘Yes, but you can employ child labour if they don’t work in hazardous areas, etc.’ No. Just stop there. No child labour.’

His comments underscore the balancing act facing Botswana as it seeks to modernise labour protections while preserving its standing as a responsible mining jurisdiction. For exporters competing in increasingly ESG-conscious global markets, legal wording can carry consequences that extend well beyond the workplace, shaping investor confidence, buyer perceptions and the country’s international reputation.

Sefalana Holding Company reported its sharpest profit decline in almost a decade after rising operating costs, weak consumer demand and disruptions to government supply contracts outweighed record sales, underscoring the pressures facing Botswana’s largest listed retailer.

The retailer posted revenue of P12.1 billion for the 52 weeks ended April 26, 2026, up 9 percent from the previous year, the highest in the group’s 52-year history. However, profit before tax fell 40 percent to P331 million, while basic earnings per share dropped to 93 thebe from 169 thebe. The board declared a final dividend of 20 thebe per share.

Sefalana said underlying profit before tax declined 19 percent after excluding one-off gains recorded a year earlier. Botswana operations absorbed most of the pressure as a seven-month gap in government milling tenders cut manufacturing profit by P72 million, while higher electricity tariffs increased costs by P25 million. Above-average wage increases for lower-paid employees added another P14 million to operating expenses.

The company said weak economic conditions continued to reshape consumer behaviour, with shoppers focusing on essential goods, value packs and private-label products rather than higher-margin discretionary items, squeezing profitability despite higher turnover.

Regional operations provided an important buffer. Namibia contributed 39 percent of group profit before tax after revenue rose 16 percent, while Lesotho remained profitable despite weaker consumer spending. Sefalana also expects its recently acquired South African investment to contribute about 10 percent of group profit over the medium term.

Despite the earnings setback, the retailer maintained a cautious outlook, pointing to new store openings, manufacturing expansion and regional diversification as key drivers of long-term growth while preserving cash to limit expensive borrowing during Botswana’s economic slowdown.

A probe by the Public Accounts Committee (PAC) on circumstances surrounding the appointment of Oteng Keabetswe as Managing Director suggest the previous board was dissolved to pave way for his direct appointment.

Members of the PAC this week scrutinized the timing and process behind the managing director’s ascent to the top job at the state-owned development finance institution.

The previous board was dissolved around August 2025. The dissolution was framed as part of the government’s restructuring of boards across several state-owned entities.

Proceedings from the PAC suggest the timing of the dissolving of the then board was too convenient. Keabetswe was appointed as caretaker managing director effective August 1, 2025, following the board’s departure. He later transitioned to the permanent role of substantive managing director on February 1, 2026, following a six-month caretaker period, with the new board appointed on October 13, 2025, confirming him.

The role of the next board, it would seem, would only be to rubber stamp the appointment of Keabetswe.

According to a member of the previous board, they had been told during their recruitment exercise that they were ‘wasting’ their time because there was already an ordained candidate for the job. He would not disclose who said that. The then board had advanced in their interviews for a suitable candidate. ‘We were conducting psychometric tests on selected candidates,’ the member said.

The PAC questioned the process behind his appointment of Keabetswe. Committee member and Nkange MP Motlhaleemang Moalosi asked Permanent Secretary at the Ministry of Trade, Joel Ramaphoi, how Keabetswe was identified and if there was an advertisement for the job and if other Batswana were given the chance to apply. The response was in the negative. Ramaphoi said Keabetswe was appointed directly by the Mnister because there was no board.

Moalosi also pointed to a forensic audit at BDC in which he alleged Keabetswe may have been implicated. He said the report pointed to alleged unethical behavior by the then investment officer Keabetswe. Sunday Standard is informed that some of the allegations in the report pointed to insider trading. Keabetswe left BDC then to work for a company in Mauritius before his return to BDC as caretaker MD in 2025 before being confirmed as substantive early this year.

Moalosi also raised questions about Keabetswe’s salary which he said was almost three times that of his predecessor. He said Keabetswe’s salary was P400,000 while his predecessor earned P150,000. He questioned why the disparity. Ramaphoi asked for time to get answers on both questions on recruitment process and the salary.

Following the dissolution and suspension of the board structure in August 2025, Keabetswe stepped in as caretaker managing director before being appointed as substantive managing director effective February 1, 2026.

The government is preparing to review the 15 percent committed allowance paid to senior public service executives as it intensifies efforts to rein in recurrent expenditure amid mounting fiscal pressure from declining diamond revenues.

Permanent Secretary in the Ministry of Finance Dr Tshokologo Kganetsano said the allowance costs government close to P100 million annually and has become a priority as authorities seek to contain spending while preserving essential public services.

Speaking on government’s expenditure reduction programme, Kganetsano said ministries had already cut operational costs, but reviewing personnel-related allowances had become unavoidable.

‘We have managed to cut expenditure in several areas, but there is still a need to revisit committed allowances because they consume close to P100 million from government coffers,’ he said.

Kganetsano questioned whether the allowance continues to fulfil its intended purpose, revealing that some beneficiaries still receive the payment despite not performing official duties outside normal working hours. He also acknowledged growing dissatisfaction within the public service, with junior officers arguing they often work beyond normal hours without receiving comparable benefits.

The Ministry of Finance is considering a wider review of public sector allowances and will engage the Directorate of Public Service Management before implementing any changes.

The proposal forms part of Botswana’s broader fiscal consolidation programme as weak global diamond demand continues to erode mineral revenues, the country’s largest source of government income. Authorities have already introduced tighter controls on travel, procurement and operational expenditure, with personnel costs now emerging as the next focus of spending reforms.

The World Bank and the International Monetary Fund have repeatedly urged Botswana to curb growth in its public sector wage bill while improving productivity and domestic revenue mobilisation.

Botswana’s newly secured duty-free access to the United States offers a competitive advantage over India’s diamond exports, which now face a 10% U.S. tariff, but a top economist says the shift is unlikely to dramatically alter the global diamond trade.

While the tariff differential could encourage some high-value diamond processing to move to Botswana, the country’s higher production costs and structural bottlenecks mean India is expected to retain its dominant position in the global cutting and polishing industry.

‘It’s helpful but not a game changer,’ said Dr. Keith Jefferis, managing director of Econsult Botswana.

‘The main problem is that India is so much more efficient (lower cost) in diamond cutting and polishing that the 10% tariff cost advantage in Botswana vs India is offset by much higher costs in general in Botswana compared to India. So, for most diamonds India is still more competitive, even with the 10% US tariff.’

The comments come as Botswana stands to benefit from preferential access to the U.S. market after Washington maintained a 10% tariff on Indian diamond imports while granting Botswana duty-free treatment, potentially giving the world’s leading rough diamond producer a pricing advantage in one of the industry’s most important consumer markets.

Jefferis said the biggest opportunity lies in larger, higher-value stones where labour costs play a smaller role in determining competitiveness. ‘The exception is for larger diamonds (3 or 5ct+) that can be cut cost effectively in Botswana, and it is possible that more of these will be cut in BW and less in India,’ he said.

Even if demand for Botswana-polished diamonds rises, Jefferis warned that local manufacturers may struggle to expand production because of domestic policy constraints.

‘However, the local industry still faces constraints in expanding. First firms cannot get the work permits they need to bring in trainers and highly skilled polishers, and second there is a punitive Training Levy that is imposed on a firm’s turnover and therefore penalises high value low margin businesses such as diamond cutting and polishing.’

He said Botswana’s levy places local firms at a disadvantage against rival polishing centres. ‘In competing jurisdictions, the TL is imposed on a firm’s wage bill not turnover, and does not impose this penalty.’ The tariff advantage also does little to address the industry’s biggest long-term challenge which is the rapid rise of lab-grown diamonds, which continue to undercut natural stones on price.

Dr. Jefferis also says the newly secured duty-free access to the United States ‘does little to change the relative price points of Botswana natural diamonds vs synthetic diamonds, as the latter has a price advantage of 70-80%’.

The assessment suggests Botswana’s improved access to the U.S. market could provide a welcome boost for selected segments of its downstream diamond industry, particularly larger stones. But without reforms to lower business costs and ease skills shortages, the country is unlikely to significantly erode India’s commanding share of the global cutting and polishing market despite the new tariff landscape.

Public accountability does not end when a public officer leaves office. Whether through retirement, resignation, transfer, or the conclusion of a term, departure from public service does not erase the responsibility to explain decisions made while exercising public authority. Botswana’s constitutional and statutory framework recognises this principle through mechanisms designed to ensure that Parliament can properly perform its oversight role.

The legal foundation for this power lies primarily in the National Assembly (Powers and Privileges) Act, rather than in the Standing Orders of Parliament. Standing Orders regulate the internal procedures of the National Assembly and do not, by themselves, create obligations for persons outside it. The Act, by contrast, gives Parliament legally enforceable powers, including the ability to require attendance, compel evidence, and address non-compliance.

Section 9 of the Act permits an order requiring a person to attend before the Assembly or a committee, and its wording is directed at ‘any person’, without limitation to serving public officers. This includes former office-holders where their evidence is relevant to an inquiry. Section 10 requires such an order to be formalised through a summons served on the person concerned, ensuring clear notice of the obligation to attend. If the person fails to comply, section 11 empowers the Speaker to direct the issue of a warrant of apprehension, executable by the Botswana Police Service to secure attendance.

These provisions are not punitive in purpose; they exist to protect Parliament’s constitutional responsibility to oversee public administration and the use of public resources. Section 12 allows witnesses to be examined under oath, while section 19 creates offences relating to failure to attend, refusal to answer lawful questions, and the giving of false evidence.

The Act also recognises reasonable limits. Section 13 permits a witness to object to a question concerning private matters unrelated to the inquiry, though the Speaker, not the witness, determines whether the objection is valid, preventing the protection from becoming an automatic refusal mechanism. Section 14 similarly protects sensitive government or security-related information, but through constitutional and executive process rather than by the witness simply declining to answer. Section 14(4) further limits the use of answers given before Parliament in unrelated civil or criminal proceedings, except in cases of perjury or obstruction arising from that evidence.

The question of former officials becomes especially relevant to parliamentary oversight of public finances. The Public Accounts Committee examines accounts and reports certified by the Auditor-General under the Public Finance Management Act, and such examinations typically occur after the relevant financial period has ended, by which time the responsible official may no longer hold the position. Were accountability to end the moment an official left office, oversight would be significantly weakened, since officials could avoid scrutiny simply by departing before inquiries commence.

The Constitution supports this approach. Section 41 protects a sitting President from certain legal proceedings during the period of office, but that protection is tied to the office and the period of incumbency. Once the office is vacated, the constitutional position changes; a former office-holder retains no general exemption from lawful process merely by virtue of having previously held high public office.

This approach is consistent with parliamentary practice in jurisdictions sharing Botswana’s Westminster legal heritage, where the authority of legislatures to call for persons, papers, and records has long been understood to extend beyond current office-holders, where the information sought concerns matters of public importance and decisions taken during a person’s tenure.

The broader principle is therefore straightforward: public office is a position of responsibility, not a shield from accountability after departure. Parliament’s ability to call former officials before it depends not on whether they remain in office, but on whether their evidence is relevant to its oversight function. A separate constitutional question remains as to how far comparable powers may apply to certain serving constitutional office-holders, including the President, and that issue requires its own analysis. The narrower position, however, is settled: under Botswana’s existing statutory framework, Parliament has both the authority and the mechanisms to require former public officials to account for decisions taken while entrusted with public responsibility.

Botswana’s economy has emerged from two years of recession, but economists warn the recovery will remain fragile unless government accelerates long-delayed reforms, reduces borrowing and tackles the country’s heavy dependence on diamonds.

The latest Econsult Botswana Review says the economy is sending ‘mixed signals’, with GDP returning to positive territory while inflation, weak diamond exports and high borrowing costs continue to weigh on businesses and households. ‘The Botswana economy continues to send mixed signals,’ economist Keith Jefferis writes in the quarterly review.

The economy grew by just 0.2 percent in the first quarter of 2026, ending successive contractions recorded in 2024 and 2025. However, mining output still declined 9.6 percent, despite stronger performances from copper and soda ash producers. The report argues Botswana’s biggest challenge is no longer simply recovering from the diamond slump, but transforming an economy still heavily dependent on a commodity facing growing competition from synthetic stones and weak global prices.

Although diamond production rose 4.7 percent during the first quarter, exports between January and May fell 29 percent, forcing producers to stockpile unsold stones. Overall exports dropped 17 percent in the first five months of the year, widening Botswana’s trade deficit to P12.8 billion. One encouraging sign, however, was a 16 percent increase in non-diamond exports, driven by stronger copper and manufactured exports, suggesting diversification efforts are beginning to gain traction.

Households have meanwhile been squeezed by rising prices. Annual inflation climbed from 4.2 percent in March to 10.7 percent in June, largely because of higher global oil prices linked to conflict in the Middle East. Econsult expects the spike to ease following July fuel price cuts. ‘We expect Botswana inflation to fall from current levels in the coming months,’ the report says, forecasting inflation of around 8 percent by year-end.

Businesses face another hurdle: expensive credit. Despite ample liquidity in the banking sector, lending has slowed sharply as high interest rates and government borrowing crowd private firms out of the credit market.

‘Government borrowing to finance large budget deficits is crowding out the private sector from the credit market,’ the report says, noting lending to businesses and households has turned negative for the first time in three decades.

Government finances have improved, helped by a P7.3 billion dividend from the Bank of Botswana, although public debt still rose from 29 percent to 34 percent of GDP last year. Econsult expects the economy to grow between 2.5 percent and 4.5 percent this year as Debswana increases production. But Jefferis says lasting growth depends on faster implementation of the Botswana Economic Transformation Plan (BETP).

‘The BETP is an admirable programme,’ the report concludes, ‘but would benefit from better reporting on its progress.’ It adds that reforms, including privatisation and improving governance of state-owned enterprises, ‘need to be accelerated.’

Botswana Meat Commission (BMC) has again failed to fully utilise the country’s annual Norway beef quota after recurring foot-and-mouth disease outbreaks disrupted cattle movements and slaughter operations, allowing neighbouring Namibia to secure additional export volumes in one of the region’s most lucrative beef markets.

Botswana and Namibia each have access to about 1,600 tonnes of duty-free beef exports to Norway under a preferential quota arrangement. Norway remains a premium market because imports outside the quota attract steep tariffs.

Namibia’s state-owned meat processor, Meatco, said it had secured additional quota volumes released by Botswana and had exported 45.2% of its Norway allocation by mid-April, compared with 29.2% at the same stage in 2024.

The Norway market contributes 18% of Meatco’s international revenue and helped drive the company’s return to profitability. In the 2024/25 financial year, Meatco earned N$1.514 billion (about P1.16 billion) from direct beef sales, with Norway accounting for roughly N$227 million (about P174 million) of revenue.

The latest shortfall extends Botswana’s struggle to consistently utilise the Norway quota since 2021, despite reforms aimed at reviving BMC. Government ended live cattle exports for slaughter in 2023 to increase supplies to domestic abattoirs after BMC struggled to secure enough cattle for export markets.

Bank of Botswana data show exports of meat and meat products recovered from P137.2 million in 2022 to P311.9 million in 2023, P403.6 million in 2024 and P441.5 million in 2025, but remain about 62% below the P1.15 billion recorded in 2016, before the prolonged decline in Botswana’s beef exports.