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A prime example of how to manage natural resources
Botswana and diamonds are synonymous. Perhaps less well known is how the country has used the stones for good
- PUBLISHED: Mon 13 Jul 2026, 11:53 AM
For more than half a century, diamonds have been the cornerstone of Botswana's economic success. Since the first major discoveries in the late 1960s, the country has transformed itself from one of the world's poorest nations into an upper-middle-income economy, thanks in large part to the responsible management of its mineral wealth.
At the centre of this stands the Okavango Diamond Company (ODC), Botswana's state-owned rough diamond sales and marketing company. Established to complement the country's broader beneficiation ambitions, ODC has become an important pillar in Botswana's vision of evolving from a mining economy into a fully fledged global diamond hub. For decades, Botswana's diamonds were marketed internationally through De Beers. While that partnership helped establish the country as the world's leading producer of high-value diamonds, policymakers recognised that bringing more commercial activity into the country would strengthen long-term economic resilience.
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According to Lipalesa Makepe, ODC's CFO and acting managing director: "Establishing local trading was a first step toward beneficiation and toward positioning Botswana as a global diamond centre, since a true diamond hub requires active trading," she explains. ODC was created to sell a portion of Botswana's rough diamond production independently, enabling the government to deepen its understanding of market dynamics and pricing structures. This approach aligns with Botswana's broader philosophy of centralised mineral governance. The country has long maintained a system in which natural resources are owned by the state and developed through partnerships or regulated concessions. "What has worked well for Botswana is a centralised approach to mineral management. All minerals belong to the government and companies operate either in partnership with the state or by paying royalties. This ensures that revenues are consolidated and reinvested in national infrastructure and economic development," Makepe says.
This model has allowed Botswana to channel diamond revenues into roads, schools, healthcare and public services, creating one of Africa's most widely recognised examples of successful resource management.
Since its inception, ODC has developed a reputation for transparency in diamond sales. The company initially relied heavily on auction systems, allowing global buyers to compete openly for parcels of rough diamonds. By publishing the results of these auctions, ODC strengthened price discovery and built confidence among international buyers. But the diamond market is cyclical, and fluctuations in global demand can create volatility in auction outcomes.
The global diamond industry has faced significant shifts in recent years. Economic uncertainty, evolving consumer preferences and the rise of lab-grown diamonds have all influenced market dynamics. Yet demand for natural diamonds remains resilient, particularly at the high end of the market. "Demand has strengthened in the last quarter, particularly for large stones and luxury jewellery. We are seeing positive margins for diamonds of two carats and above, while smaller stones remain under pressure — a 'K-curve' effect where margins rise for larger goods but decline for smaller ones," Makepe explains.
This dynamic highlights one of the industry's key obstacles. "The challenge is to supply more high-value stones while finding more profitable ways to sell smaller goods," she adds. ODC's sales platform allows the company to closely monitor these trends and adjust supply strategies accordingly. By engaging directly with mines and customers, the company should be able to align production profiles with market demand — a crucial factor in maintaining Botswana's competitiveness in the global diamond market.
ODC also plays an important role in strengthening Botswana's domestic diamond ecosystem. Historically, most value-added activity in the industry — cutting, polishing and jewellery manufacturing took place outside the country. Botswana is now working to change that by encouraging local beneficiation and supporting citizen-owned businesses. ODC has introduced citizen tenders, which allow Botswana entrepreneurs to participate in diamond trading and build the expertise needed to move further down the value chain.
"We are keen to see the sector move beyond trading into manufacturing. We have also invested in skills development of local citizens. In partnership with the De Beers Academy, we have sponsored 18 members of the Teemane Dealers Association to attend training programmes," Makepe says.
Botswana already has strong capabilities in certain segments of diamond processing. "Botswana's workforce in local factories is already capable of polishing larger stones profitably. However, for smaller diamonds, international manufacturers in Botswana often export them to India, where labour costs are competitive," she explains.
Developing a fully integrated domestic industry — from rough diamonds to finished jewellery is therefore a key strategic priority. Encouragingly, progress is already visible. "In Botswana itself, we have seen encouraging progress — about 65 per cent of total diamond sales are expected to be manufactured in the country under the beneficiation programme. This is the kind of growth we want to continue."
As ODC continues to evolve, it is helping ensure that Botswana's most famous natural resource remains a powerful engine for national development and global partnership.