Diamond market crash sparks historic power shift as Botswana elects first opposition president

Botswana, long seen as a model of democratic stability in Africa, has witnessed a seismic shift in its political landscape following a dramatic election upset. For the first time since independence, the Botswana Democratic Party (BDP) has lost its majority, with the opposition Umbrella for Democratic Change (UDC), led by human rights lawyer Duma Boko, winning control of parliament. The election outcome reflects widespread public frustration over the nation's economic downturn, fueled by a collapse in global diamond markets, high unemployment, and increasing crime and corruption. As Botswana's new president, Boko has vowed to revitalize the economy, create jobs, and renegotiate key deals in the diamond sector, signalling a new era for the diamond-rich nation..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Mbongeni Mguni .___STEADY_PAYWALL___.An opposition coalition emerged as the shock winner of Botswana's parliamentary elections, the first time power has changed hands in the diamond-dependent southern African nation since independence almost six decades ago. .Duma Boko, a Harvard-educated human rights lawyer, was sworn in as president Friday after his Umbrella for Democratic Change secured an outright majority in the 61-seat legislature. He succeeds Mokgweetsi Masisi, whose Botswana Democratic Party was widely expected to retain its majority, yet finished in fourth place. .Voters punished the BDP for an economic downturn triggered by a collapse in the diamond market, which generates the bulk of government revenue and export earnings. Public anger over a 28% unemployment rate has been compounded by rising levels of crime and corruption..Read more: FT: World's second-largest diamond found in Botswana."I will respectfully step aside," Masisi told a briefing in the capital, Gaborone, that was broadcast on state television. "I wish to congratulate the opposition. I respect the will of the people.".While Botswana has long been held up as one of Africa's most successful democracies, disaffection with the system has surged, an Afrobarometer survey published in July shows. Just 30% of respondents in the country expressed satisfaction with democracy, down from 70% a decade ago — which was among the sharpest drops on the continent..Similar patterns have emerged elsewhere in the region, including neighboring South Africa, where the African National Congress in May lost the parliamentary majority it's held since the end of apartheid three decades ago. In Mozambique, the party that's ruled for the past 49 years extended its tenure in Oct. 9 elections that observers and opposition parties said were marred by irregularities. .The BDP's implosion stunned its leadership, with outgoing Vice President Slumber Tsogwane saying he had no clue why it performed so badly. The party won just four parliamentary seats, down from 38 five years ago. .The UDC secured 36 seats, the Botswana Congress Party 15, and the Botswana Patriotic Front five, while one went to an independent candidate, final results released by the electoral commission on Saturday show. .Read more: Botswana reviews global bids for new rail line as South Africa's logistics woes force re-route.Moeti Mohwasa, Boko's spokesman, said the country's outgoing leaders held themselves aloof from the people they were meant to serve, weren't accountable and failed to ensure resources were equitably distributed. .Boko, 54, who has run for the presidency twice before, has pledged to create at least 400,000 jobs within five years, boost the minimum wage, clamp down on corruption and cut water and electricity tariffs. Those undertakings clearly resonated with the electorate even though they may be hard to fulfill. .The free elections reflected the voice of Botswana's people, said US Secretary of State Antony Blinken, who congratulated Boko and his coalition on their victory and commended Masisi for his commitment to a peaceful transfer of power. .Botswana is the world's largest producer of rough diamonds by value, with almost all of its gems mined by Debswana — which is jointly owned by the government and De Beers, a unit of Anglo American Plc. Global diamond sales have been impacted by oversupply, poor demand from the crucial Chinese market and pressures from lab-grown gems..Masisi's administration last year negotiated a new 10-year accord with De Beers that will give the nation access to more diamonds and help it secure 10 billion pula ($751 million) in development funding..Boko criticized the way the deal was negotiated and said it had adversely affected the country's relationship with De Beers, which was now considering walking away from it. The new administration will engage with the company to understand its concerns. ."'We have to safeguard the goose that lays the golden egg and have some revenue generation while we pursue diversification" of the economy, he told reporters Friday..In a July interview, Boko said he wants Botswana's government to increase its stake in De Beers to 51%, from 15% currently, and called for the company to relocate its headquarters from London to Gaborone..Anglo American paid $5.1 billion for the Oppenheimer family's 40% stake in De Beers in 2011. .In February, Anglo American wrote down the value of its 85% share in the diamond producer by $1.6 billion to about $7 billion, and in May it put the unit up for sale after fending off a $49 billion takeover bid for the group from BHP Group Ltd. ."It is an opportunity for the government of Botswana, in our view, to acquire a substantial controlling stake in De Beers," Boko said in the interview. "When it's in some crisis, it's normally the best time to acquire.".Read also:.Johannesburg on the brink: RW Johnson on water, infrastructure, and political misstepsCaught in a scam: How Banxso lured an investor into a financial trapFT: Buffett's Berkshire ditches Apple; sells $166bn in stocks; builds record cash reserve.© 2024 Bloomberg L.P.

Diamond market crash sparks historic power shift as Botswana elects first opposition president

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