The Zimbabwe-Botswana Bi-National Commission went off to a massive start on Monday after it was announced that Gaborone will extend two funding facilities worth $600 million to Harare to support the local diamond industry and the private sector.
Zimbabwe is hungry for such support as it works to revive its economy that is hamstrung by Western sanctions since 2000.
The economy cannot access funding from the major lenders in the US, Europe and other Western capitals because of the embargo.
In addition, investment from those quarters has basically dried up as companies from there find the proposition of investing in our sanctioned economy too risky.
As a result, our country has sought and obtained much investment and financial support from China and, lately, from Russia.
African countries had, over the past 19 years, not really gone beyond political and diplomatic support for Zimbabwe.
But as the Second Republic intensifies its engagement and re-engagement drive, Botswana has committed to investing in our economy.
There have been reports that South Africa is considering some facilities as well.
“Zimbabwe welcomes with much appreciation that Botswana proposed a BWP1 billion (approximately US$94,5 million) credit facility, in support of the Zimbabwe private sector,” said Zimbabwe’s Secretary for Foreign Affairs and International Trade Ambassador James Manzou on Monday.
“I would like to encourage all of us as officials to fully utilise our two working days to synthesise the remaining issues that will lead to the operationalisation of this facility. Zimbabwe is also appreciative of the US$500 million diamond facility offered to it by Botswana. I also urge this meeting of officials to work in earnest to ensure that all outstanding issues relating to this facility are finalised. . . . I wish to express my gratitude for the support extended to Zimbabwe by Botswana as our country embarks on a fresh development trajectory under the new dispensation. That support has not only come in the unyielding commitment towards enhancement of relations through the BNC, but also in programmes that will support our economic recovery in line with Zimbabwe’s Second Republic’s seminal blueprint, the Transitional Stabilisation Programme.”
He added: “We should speedily activate the Joint Technical Committees in the two sectors to ensure actionable programmes take off immediately. In the mining sector, Zimbabwe is especially keen to emulate how Botswana managed to harness its diamond resources giving it a critical role in transforming the country into one of the most prosperous on the continent.”
The agreements are likely to be formally signed tomorrow when the Bi-National Commission (BNC) concludes.
We are particularly delighted about the $500 million that Botswana will provide to help boost our diamond industry.
Since diamonds were discovered at Chiadzwa in Manicaland around 2006, the economy has not realised the full potential of the gems.
This is because of lack of equipment, skills, beneficiation capacity and so on; areas that we are happy Botswana can assist.
The diamond facility is critical for us as alluvial diamonds have now been mined out at Chiadzwa and there is now a need for companies to extract deeper-lying gems that are more expensive to reach, yet more valuable.
Botswana’s economy moves on diamonds.
Diamond revenues have been judiciously used to build modern infrastructure such as roads, hospitals, and schools, and to significantly elevate the incomes of Batswana.
Revenues from the precious mineral account for 76 percent of Botswana’s export revenue, 45 percent of government revenue, and 33 percent of the gross domestic product.
An impoverished country at independence from Britain on September 20, 1966 with a per capita income of about US$84, Botswana now enjoys a per capita income of US$6,788, among the highest in Africa.
“The foundation stones of this success story were political stability, respect for the rule of law, and democratic leadership, drawn from the traditions of Batswana culture in which the will of the people is recognised, and in which high levels of consultation and consensus-seeking are common,” says the De Beers Group that is in a 50:50 joint venture partnership with the Government of Botswana in Debswana which runs four diamond mines in that country.
“A second feature was the careful planning and investment of all diamond resources in infrastructure and human capital development. Five-year National Development Plans have been introduced since the time of independence, and these have consistently directed mining rents to investment in water and transport infrastructure, education and healthcare. Public spending on social services, still heavily funded by diamond revenues, remains high today.”
We have a lot to learn from Botswana, especially how they manage their diamond wealth to achieve so much socio-economic prosperity.
Zimbabwe is effectively a virgin territory for diamond exploration, and, as has been speculated, is the world’s biggest reservoir of diamonds.
With more responsible extraction, value addition, skills and financial resources the country can be a completely new economy in the next few years.
The US$500 million facility from a good neighbour should lay a strong foundation for that big development story.