This African nation built its development on diamonds. Now it’s crashing down

In a village outside Gaborone, Keorapetse Koko sits on an aging couch in her sparsely furnished home, contemplating how her 17-year career in diamond cutting and polishing came to an abrupt end. Her personal struggle mirrors the broader economic crisis facing Botswana, a nation whose remarkable transformation has been built almost entirely on diamonds.

“I have debts and I don’t know how I am going to pay them,” says the mother of two, who previously earned about $300 monthly and relied on her employer for medical insurance. “Every month they call me asking for money. But where do I get it?”

Botswana’s diamond industry, once the cornerstone of its economic miracle, is facing unprecedented challenges. The discovery of diamonds in 1967, just one year after independence, dramatically altered the trajectory of this landlocked African nation. Over the decades, Botswana became the world’s top diamond producer by value and second-largest by volume after Russia, using its mineral wealth to fund healthcare, education, and infrastructure development.

Unlike many resource-rich African countries that fell victim to corruption and conflict, Botswana managed its diamond resources prudently. The stones became woven into the national identity, with Olympic champion runner Letsile Tebogo representing De Beers in campaigns highlighting how diamond revenues fund public services.

“Diamonds built our country,” explains Joseph Tsimako, president of the Botswana Mine Workers Union. “Now, as the world changes, we must find a way to make sure they don’t destroy the lives of the people who helped build it.”

The economic indicators reveal a troubling situation. Diamond exports, which account for approximately 80% of Botswana’s foreign earnings and a third of government revenue, have plummeted. Debswana, the largest local diamond producer and a joint venture between the government and De Beers, saw its revenues halve last year and has paused operations at several mines.

In September, Botswana’s national statistics agency reported a staggering 43% drop in diamond output during the second quarter—the steepest decline in the country’s modern mining history. The World Bank now expects the economy to contract by 3% this year, marking the second consecutive year of negative growth.

The primary culprit behind this dramatic downturn is the meteoric rise of lab-grown diamonds, primarily produced in China and India. Once comprising just 1% of global diamond sales in 2015, synthetic diamonds now represent nearly 20% of the market. These lab-created stones sell for up to 80% less than natural diamonds and are aggressively marketed as cheaper, conflict-free, and environmentally friendly alternatives.

“The new generation of youngsters getting engaged have far more important things to spend their money on than a diamond,” observes Ian Furman, founder of Naturally Diamonds in neighboring South Africa. “So, it’s become so attractive to them to buy lab diamonds.” Furman notes that of every 100 diamonds his company sells, around 95 are now synthetic—a dramatic shift from just five or six years ago.

The synthetic diamond trend has been amplified by celebrities and social media. Hollywood stars like Billie Eilish and Pamela Anderson, Bollywood celebrities, and Gen Z influencers have all contributed to laboratory-grown diamonds’ growing appeal.

Yoram Dvash, president of the World Federation of Diamond Bourses, recently warned that an “unprecedented flood” of synthetic gems now threatens natural diamonds’ value and future. He highlighted that lab-grown stones now account for most new U.S. engagement rings, while natural diamond prices have fallen approximately 30% since 2022.

The impact extends beyond Botswana. Throughout southern Africa, declining natural diamond production and revenue have triggered job cuts and economic strain. In response, five African diamond-producing nations—Botswana, Angola, Namibia, South Africa, and Congo—agreed in June to pool 1% of their annual diamond revenues into a global marketing campaign promoting natural stones.

The Natural Diamond Council, whose members include major mining companies like De Beers Group and Rio Tinto, launched a “Real. Rare. Responsible” campaign starring actor Lily James to reposition natural diamonds as unique and ethically sourced.

“Restoring natural diamonds’ desirability is essential to protect producer economies, particularly in southern Africa,” explains Kristina Buckley Kayel, the council’s managing director for North America.

Recognizing the need for economic diversification, Botswana’s government established a sovereign wealth fund in September focused on investment and diversification beyond mining. The country is now looking more intently at its elephant-heavy tourism industry and other mining options, including gold, silver, and uranium.

For Koko and thousands of other laid-off diamond workers, however, these policy changes may be too little, too late. “I was the breadwinner in a big family,” she says. “Now I don’t even know how to feed my own. Looking for another job is very difficult. The skills I learned are only relevant to the diamond industry.”

In a final bitter irony, despite spending 17 years working with some of the world’s most precious gems, Koko has never owned a diamond herself. Even the smallest would be a luxury far beyond her means—a stark reminder of the gap between those who process Botswana’s wealth and those who truly benefit from it.