If you're excited, can you clap? Yeah, that's what I love to hear. Our next fireside chat is a renowned educationist who has contributed to the development of the secondary school curriculum and evaluation, the fifth president of the Republic of Botswana, and the president of the Botswana Democratic Party. Please give a warm welcome to His Excellency, President Masisi. And our moderator, the international correspondent of CNN and host of the African Voices series, previously a North American correspondent for the BBC and a fill-in anchor who has presented CNN International programs from Atlanta to Dubai. Please give a warm welcome to Larry Madowo.
Hey everyone. Hey, how's everybody doing? Two people responded. President Masisi, I think let's go back. Let's try that one more time. Good evening, the Apollo.
Such a spontaneous audience. President Masisi, how are you doing?
I'm doing really good, all the more for being in the Apollo. Wow.
What an iconic place. Welcome to the Apollo.
You've had a busy time in New York. Lots of meetings, engagements, all of that. Here we want to talk about the creative industries and what you're doing in Botswana. But the backbone of Botswana's economy is diamonds. That is the bread and butter of the country. That's what it's traditionally known for. But you're diversifying the economy away from overreliance on diamonds. There's a whole story here. Give us the background.
Well, for those of you who might not know, Botswana lies smack in the middle of Southern Africa. To our west is the Republic of Namibia, whose good president and friend of mine, older brother was here just now, President Geingob. And to the south is South Africa. To the east is Zimbabwe. And to the north is Zambia, and slightly northwest of us and north of Namibia is Angola. That's Botswana. It is semi-arid and became independent in 1966. And its claim to fame at independence was it being the fourth poorest country on planet Earth—a basket case. Nobody, literally nobody had any reason to believe Botswana was ready for independence. In particular that we had to go cap in hand begging for aid from our former colonial master literally to run the recurrent budget, not to mention developmental assistance. There were about 10 graduates of our citizens, and three kilometers of road thanks to a visit by the royal majesty King George in the 1940s when he stopped for a cup of tea and a strip was built for him to dismount from the carriage to go and visit the natives. And we only had like two secondary schools and nothing else. Luckily, and really luckily, diamonds had not been discovered, because I bet you some of us would probably not be alive if they had been discovered before independence.
So Botswana discovered diamonds after it got independence?
So the British had no access to Botswana's—
They had no access. Thankfully, they don't have a good reputation for what they do when they find diamonds.
Or any minerals of any kind, for that matter.
Yes. And you know, the other interesting thing is we very quickly decided, as our leaders did, to consult everybody in Botswana and particular leaders to voluntarily cede whatever claim they may think they would have had to any mineral wealth to the state. And so those are the beginnings of the legislative framework to provide for good governance in the mineral space, and legislation was promulgated which settled this. So all mineral wealth is vested in the state for use for good. And so the first mines came about, and interestingly, the finder of the diamonds was a company known as De Beers. You know it.
Scary. De Beers found our first diamonds. And their attitude when they found them was to come to the government and say, "We found the minerals. Give us a license. We want to mine them." They thought they owned the mines. And we said, "Uh-oh, hang on." We then ventured into what other countries, such as Namibia, also did, where we developed a joint venture between De Beers and the government, which became the license holder to mine. So we co-owned from the start, but admittedly we were novices at this. So the negotiations that we had and the contracts that were signed were those you'd expect to be signed by people who did not know anything about mining. And when we look at it now, we realize how unfair it was. And here's where the unfairness is: it provided for the sale of rough diamonds exclusively to De Beers, 100%. We had no capacity to value the diamonds, let alone count them nor mine them. And the revenue we got, we plowed straight back into the development of human capital to learn how to mine and the support services. So if you really look at Botswana since the mining of diamonds and all developments in Botswana, it's almost exclusively attributable to diamond mining. So we used everything we could to grow ourselves, and boy, did we grow. We grew our institutions, and we grew human capital. Fast forward to 2011, because these contracts and agreements with De Beers have time limits. 2011 was a time when the agreement was up for review and renegotiation. And at that time, for the first time in the history of Botswana, we were able to negotiate successfully for the taking of 10% of production by the government. And the reason we did that was we wanted to discover price and understand how to sell, understand the market, and determine if we could actually get a better price outside De Beers. But 10% is pretty small. And the next time the agreement was up for renegotiation, lucky me, I was president.
And you knew the unfairness that had been part of this deal before.
You know, before being president, from 2014 I had been vice president until 2018 when I took over. And you know, the minute you get to the vice presidency, yeah, you start sniffing the presidency, you know. So I thought, "Yeah, I might just get there, so I better get ready." So I needed to focus on those sectors of the economy that were really important and those which provided an opportunity to rivet and scale. So diamonds were a natural choice. So I spent time reading. I spent time traveling the world and talking to people who had been in it. And I got so comfortable in my understanding of what needed to be done. I then became very friendly to all those who are involved in the diamond industry so that they would freely and willingly embrace me, and they did. And when they do, you have an opportunity to find out a lot more from them than you otherwise would. And so when I became president in 2018, luckily the agreement was up for renegotiation in 2019. But that also happened to be the year we had our general election. So I focused on the general election, won, put it in the bag, and then I focused on De Beers.
I like how President Masisi casually saying he won an election and then got rid of that so we can focus on De Beers, because what he's setting up is being hailed as a model for how to handle these kinds of transactions with—
