After more than five years of negotiations, De Beers and the Botswana government have finally reached an agreement on a new sales deal for rough diamonds. However, despite this progress, the official signing is still pending. Bogolo Kenewendo, Botswana’s Minister of Minerals and Energy, expressed hope that the deal would be finalized within the month—a sentiment De Beers CEO Al Cook echoed during a press briefing.
The newly elected Umbrella for Democratic Change (UDC) government, led by President Duma Boko, has proudly claimed that it managed to close the deal within 100 days. This swift resolution has raised questions about why negotiations under the previous Botswana Democratic Party (BDP) government, which ruled for nearly 60 years, took significantly longer.
The BDP, which lost the October elections, released a statement asserting that the deal was a direct result of their administration’s strategic vision and negotiation efforts. The party suggested that the only remaining issue before finalizing the deal under their leadership was a tax dispute between De Beers and the government.
The BDP has raised concerns that the new UDC government may have waived a significant tax debt owed by De Beers to Botswana. According to the party, the outstanding tax amount could be anywhere from BWP 4 billion (USD 290 million) to BWP 14 billion (USD 1.02 billion).
In their official statement, the BDP questioned:
- Whether the UDC had indeed waived this tax, and if so, on what terms?
- If the waiver had been granted, did it deprive Batswana (citizens of Botswana) of much-needed funds for healthcare, education, and infrastructure?
The tax dispute is not new. In 2021, a confidential report by the Botswana Unified Revenue Service (BURS) claimed that De Beers owed BWP 4 billion in taxes after structuring its operations to reduce tax liabilities. Reports also suggest that Botswana’s previous government under President Mokgweetsi Masisi may have considered writing off the tax debt as part of securing a sales agreement with De Beers. However, whether this tax waiver was ever officially granted remains unclear.
A De Beers spokesperson, addressing the concerns, stated:
“In line with the principles outlined in our board-approved tax strategy, we take a responsible approach to the management of taxes, supporting the principles of transparency and active and construcive engagement with our stakeholders.”
While the new agreement is expected to strengthen Botswana’s diamond industry, the tax dispute surrounding the deal has sparked political controversy. If a waiver was indeed granted, the implications could shape Botswana’s economic policies and public perception of the new government.
Botswana’s new government closed a De Beers diamond sales deal in just 100 days, but questions arise over a possible multi-billion tax waiver. Read more on The Southern African Times.
