The central business district of Gaborone, Botswana. Picture: THINKSTOCK
The central business district of Gaborone, Botswana. Picture: THINKSTOCK

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BOTSWANA is world-renowned for two things: awe-inspiring game parks and diamonds. But unlike its timeless natural beauty, the diamonds are not forever. Botswana needs to prepare for an economic future without them.

For years, the government has talked about economic diversification, but in practice little has been done. That’s not to say Botswana has mismanaged its diamond inheritance. It is rightly held up as an example of what can be achieved when natural resources are harnessed responsibly. I feel this keenly because I spent much of the past decade working as a United Nations (UN) sanctions inspector in Sierra Leone, Liberia, Côte d’Ivoire and Angola, trying to stop rebel-controlled "blood diamonds" from contaminating global supply chains.

I have seen the human rights abuses and corruption, and the arms and ammunition bought by conflict diamonds. I have also seen governments fail to harness diamond mining effectively, losing precious tax revenues for the state.

Conversely, Botswana has managed its diamonds wisely since it discovered them in 1967, and has even used its experience of diamonds as a force for good elsewhere. In 2006, when I chaired the UN Group of Experts on Côte d’Ivoire, I worked closely with the presidency of Botswana on the Kimberley Process — an international programme to end links between diamonds and conflict — to help stop Ivorian and Liberian conflict diamonds passing through Ghana’s supply chains.

Botswana is fortunate. It has enjoyed protracted peace and responsible government, underpinned by robust functioning institutions. Its kimberlite diamonds are easily extracted through large-scale industrial mining, avoiding the political and bureaucratic headaches created by smaller-scale artisanal mining that have blighted Zimbabwe’s and Angola’s diamond industries.

Yet unlike Angola’s and Zimbabwe’s, Botswana’s diamonds are running out. So what to do?

In the short term, becoming more efficient and extracting more value from the industry is a good strategy. By late 2013, the largest beneficiation exercise in Africa was completed, with De Beers having relocated its aggregation and sales operations from London to Botswana.

An agreement to move some diamond-cutting to Botswana was also reached in 2011. This has created more domestic jobs, although given the high costs of cutting and polishing diamonds in Botswana compared with Asia, long-term prospects remain uncertain.

In the longer term, economic diversification will be necessary. In 2010, the government launched a programme to reduce the nation’s reliance on mining — of nickel, copper, coal and iron ore as well as diamonds — that has registered more than 1,000 new businesses and created about 28,000 jobs so far.

High-end tourism has also grown but, on its own, will not be enough to replace diamonds. Other new industries need to be developed, ranging from agriculture to financial services and manufacturing. An international conference in Gaborone this week run by Chatham House, De Beers and the Botswana government, aims to help encourage a new approach.

Botswana is in a strong position to respond. The government still receives regular cash flow from taxes and royalties on diamond production, and enjoys an enviable reputation globally. It has Africa’s fifth-highest per capita income of $7,183, according to data from the International Monetary Fund. Its A2 credit rating from Moody’s Investors Service puts it on a par with Poland, and ahead of Hungary and Turkey.

Yet, in an increasingly globalised and competitive world, complacency can easily be punished by investors, and these advantages may not last. Botswana should prepare for the future now, particularly through enhancing human capital and building up new infrastructure.

• Vines is head of Chatham House’s Africa programme and co-director of Coventry University’s African Studies Centre