The 159-year-old debating chamber of the Cambridge Union Society has played host to some of history’s most consequential leaders. From British Prime Ministers Winston Churchill and Margaret Thatcher to US Presidents Theodore Roosevelt and Ronald Reagan, the wood-panelled theatre has resounded to orators of world renown.
A year ago, Botswana’s Vice-President and Finance Minister Ndaba Gaolathe might not have expected to find himself addressing the famous venue at the annual conference of the African Society of Cambridge University. But since then, there have been major changes in Botswana’s governing structure.
Until November, the ruling Botswana Democratic Party had reigned supreme since the dawn of independence in 1966. But following President Duma Boko’s stunning victory – propelled by his pledge to create 500,000 new jobs in five years – his deputy Gaolathe found himself launched into two senior offices, and onto the world stage.
Gaolathe looks at home during our conversation sitting on the Society’s famous scarlet benches, under the watchful eyes of portraits of past Society presidents. But taking in the historic surroundings and basking in electoral success is far from his priority.
The honeymoon period which attended the election of Boko’s Umbrella for Democratic Change is quickly drawing to a close. Just days after Boko’s shock election win in November, President Donald Trump swept back into power in the United States – and set the world economy on a path of trade war, tariffs and turmoil.
Botswana, the world’s second-largest producer of diamonds by volume, finds itself exposed to an underperforming global market for the stones, Trump’s caprice, and the very real threat of 37% tariffs on its exports to the US.
The IMF expects the economy to shrink by 0.4% this year – hardly encouraging grounds for the promised employment revival. Given such a discouraging start, can Gaolathe build the economy that Boko promised his voters?
While cognisant of the worsening global economy, the Finance Minister insists that his plans to impose fiscal discipline, diversify the economy, reinforce policymaking credibility and invest in transformative infrastructure remain unchanged.
“We have to be optimistic because, as I continue to say, we’ve been blessed with all the ingredients we need to build our country. The first of our priorities is to halt the haemorrhaging of our fiscus [treasury], because even though Botswana over the last few decades has outperformed everyone else on the African continent, we need to accept that there has been a period of lapse which has taken place, arguably, over the last 12 years or so.
“The fiscal discipline we used to have has broken down. In the past it was accepted that we don’t allow politics to interfere with the work of the professionals that manage the economy, particularly the Finance Ministry; we contaminated that culture; we allowed politics to make the economic decisions.
“We threw away priorities and the emphasis on investing for the future – such as in infrastructure – in favour of immediate consumption. We allowed corruption to set in. So our first priority is to halt all this, and I believe that given that we have been there [in office] a few months, we’ve already done well on that front.
“You find we’re allowing politics to a large extent not to decide what makes sense in economics. We are galvanising ourselves around priorities, managing properly again, building capacity and our capabilities around properly managing infrastructure, doing things on time.”
The unemployment challenge
It’s a vision of fiscal conservatism that does not often find favour with voters in Southern Africa, but Gaolathe believes it will chime with investors and help to achieve the hugely ambitious jobs goal that Botswana’s citizens demand the new administration meet.
While the country has long been a standout economic performer in Africa, largely due to its judicious management of diamond revenues – it was ranked sixth on the continent in 2024 with a GDP per capita at purchasing power parity of $19,039, according to the IMF – its people have long suffered from elevated unemployment.
It was an unemployment rate of over 23% – perhaps 11% higher among the country’s youth – that provoked the unprecedented electoral revolt against the BDP. In many voters’ eyes the ruling party had grown complacent after six decades in office.
The softly-spoken son of Baledzi Gaolathe, the former Finance Minister under Presidents Festus Mogae and Ian Khama, pulls few punches in assessing the past. He argues that the governing elite and civil service have proven themselves unequal to the challenges of running a modern economy: training has lagged; knowledge of cutting-edge sectors is weak; and the country has produced too few engineers, ICT experts and tradespeople, he says.
“We don’t have the capabilities and capacity to do what the modern world requires. We don’t have the capacity to structure the public-private partnerships that we need to build mega-
infrastructure projects. We don’t have the capabilities to leverage and bring the best out of AI and tech.
“We need to build it. We need to retrain and revitalise the government civil service. We’ve never experienced the type of unemployment levels we have now, particularly among young people and educated young people. The education system has been purely geared to creating social sciences graduates. The unemployed are highly educated. This means we have a real opportunity to upskill rapidly to AI, tech, and indeed there are steps we’re taking and partnerships we’re putting in place.”
Keeping the state out of business
Gaolathe argues that the dead hand of the state has stifled Botswana’s economic potential, including through an extensive network of state-owned enterprises (SOEs).
“The second priority is that we need to modernise, revitalise and restructure our state-owned enterprises. In a small economy like that of Botswana, that has maybe 50 SOEs across every sector, from water and power to telecoms and financial services, they are an important part of the economy.
“If it’s not efficient, if its sub-
optimised, if governance is not strong, if you don’t have enough competent CEOs, that affects the economy in a big way,” he says.
The VP says the government is looking to proceed with plans to unbundle power generation and transmission while allowing the private sector to enter the market.
In agriculture, Gaolathe says the country’s huge ranching economy – it boasts up to 2.8m head of cattle – is to be freed from the strictures of the state-run Botswana Meat Commission and its monopoly role in beef exports. That process began under the last government and will be completed. “We’re allowing different players into different parts of the food value chain. In financial services we are much more open to partnerships to bring in technical expertise and capital.
“All of these SOEs are very much scalable, they can become continental players… We have not really had a forecast on sectors that have the highest prospects of success – it’s time we did. In the past, government poured money into SMEs [small and medium enterprises] because it was popular. Now we need to support commercialised, high-productivity agriculture.”
The idea of this diversification drive, he says, is not that diamonds will play a smaller role in the economy – but that “everything else will play a bigger role than it used to”.
In a straitened fiscal climate, one of Gaolathe’s major premises is that much can be achieved with self-funding public-private partnerships.
In particular, he wants to push forward with a string of what he refers to as “mega-infrastructure” projects – including massively boosting road and railway connectivity to the major urban centres in neighbouring Southern African countries – that will one day pay for themselves. Still, he adds ruefully, “we will always need borrowing” to optimise investments.
On 16 May the African Development Bank confirmed it would loan $304m to “cushion Botswana from the financial shock caused by declining diamond revenues”.
All that glitters
If Gaolathe still sounds as though he’s operating from the opposite benches, it may be a reflection of the speed with which events have proceeded in recent months. After years on the sidelines, President Boko and his team no longer enjoy the luxury of opposition – they find themselves having to make decisions of immense consequence for the future of Botswana.
Perhaps the government’s most significant move so far was the signing of a long-delayed 10-year diamond sales agreement with De Beers, in which it has a 15% shareholding and with which it runs the 50-50 Debswana joint venture.
Few African countries and companies have a more symbiotic relationship than Botswana and De Beers – and against the backdrop of a struggling global diamond market and speculation over the sale of De Beers by parent company Anglo American, it was crucial for both parties that the deal extension brought a measure of certainty.
Under the final deal, Botswana’s state-owned Okavango Diamond Company will sell 30% of Debswana’s rough diamond production in the first five years of the deal and 40% for the second five years; De Beers will sell the rest. That 40% could be increased to 50% under a proposed five-year extension.
Both parties will supply stones to the domestic industry in a bid to boost local value addition. Debswana’s mining licences, which were due to expire in 2029, will be extended until 2054. Gaolathe says the government will establish a diversification fund from diamond proceeds which will operate like a private equity fund to invest in emerging entrepreneurs and sectors.
“We have us a good deal and we trust that it will carry us into the future. To the people of Botswana, this…
