How diamonds became a power for good in Africa
Business Day, South Africa
18 August 2006
AFRICA’S commodities, especially diamonds, have a bad development reputation. But they have also been given a bad rap.
They are all too often judged as reasons behind, and a fuel for, conflict — articulated in the academic literature as the “greed versus grievance” argument. But this is a false dichotomy, misrepresenting their real value. With the right ingredients of good governance and careful leadership, commodities have been a tremendous force for continental good.
Africa’s diamonds have had a positive impact on the economic development of key producer countries, notably Botswana, Namibia, SA and Tanzania. Yet, anxious to find an explanation for conflicts in Liberia, Sierra Leone and, to some extent, the Democratic Republic of Congo, writers, film makers and nongovernmental organisations continue to blame diamonds. The term “blood diamonds” is now enshrined in the literature of such organisations and in our collective psyche.
Yet the negative association that gives rise to this term could be applied to any commodity that supports governments and non-state actors involved in repression and violence. Liberia and Sierra Leone may have used diamond revenue to decimate their populations but Rwanda did not use diamonds to carry out its genocide. It relied on foreign aid and loans.
Contrary to the widespread perception of a business operating outside or on the fringes of the law, diamond producers have instead worked together with governments and nongovernmental organisations to establish a unique regulatory public-private partnership as the Kimberley Process. This diamond certification scheme cuts out all but a small fraction of blood diamonds, just 0,2% of overall African diamond trade — or $20m — at last count. Now the industry is again leading the way in finding means to regulate the 1-million African artisanal diamond miners and ensuring a better price for their hard work through the Diamond Development Initiative, with the first pilot scheme in Tanzania.
And why should the Kimberley model not be extended to other commodities, including gold and rare metals, and particularly to Africa’s $200bn yearly oil production? This is not the only positive change in the African diamond industry in the past decade. Previously viewed as a monopoly, De Beers is today recognised as being in compliance with the strict competition laws of the European Union and the US. The historical view of the diamond business operating on the fringes of legality, benefiting a few at the expense of Africa’s citizens, is a parody not in line with the contemporary reality of increasingly widespread, mutually beneficial public-private partnerships.
The occasion this September of the 40th anniversary of its independence reminds one of Botswana’s exemplary record in this regard. Gross domestic product per capita has increased from $70 in 1966 to $9000 today. This increase owes everything to the productive combination of diamonds, governance and sound leadership. Botswana’s government has moved positively in taking charge of diamond production by becoming an important shareholder in De Beers. More than a commercial relationship, this is a symbol of what is possible when government and business co-operate in Africa over commodities.
A positive attitude towards the harvesting of resources in Africa — especially diamonds — by the international community is needed. Today’s African governments are more responsible and responsive towards their citizens; so nongovernmental organisations and other advocacy groups should adjust their view of Africa lest they damage the very people they are trying to assist.
Mineral-rich countries, including Angola, Botswana, Liberia, Namibia, Sierra Leone, SA and Tanzania, should be encouraged to work with the mining industry and other development partners, including nongovernmental organisations, which are generally working for the development and the wellbeing of the people, in order to exploit such resources for the benefit of their people. Regulatory measures should be enforced to ensure that the exploitation of one of Africa’s most precious commodities is no longer perceived as synonymous with the exploitation — or worse — of African people.
Recent Group of Eight summits have focused on the emerging partnership between Africa and the international community, of a continent increasingly recognised for its reform efforts. The past of blood diamonds is behind us. We are instead looking forward to the future, focusing on enhancing domestic certification schemes, increasing the number of Africans employed in trading, polishing and cutting, and extending private-public regulatory practices to other sectors. We would prefer if all our friends in the international community looked in the same direction.
Patrick Mazimhaka is the deputy chairman of the African Union Commission. He writes in his personal capacity. This article appears as a preface to a forthcoming publication of the London-based Royal United Services Institute on African security, commodities and development.