Lesotho & Botswana
Lesotho’s political and constitutional history has been relatively peaceful compared to what has been experienced by many other African countries. Since gaining its independence in 1966, there have been notable lengthy periods of constitutional rule, the first being from 1966 to 1970 while the second extends from 1993 to today.
In regard to Lesotho’s economy, the country benefits from its membership of a common monetary area and in particular from its close economic ties to South Africa, which it has established as a key importer of its excess hydroelectric power. The government has established a multi-billion dollar World Bank-supported Highland Water Project which channels water from the Maluti Mountains to the Johannesburg/Gauteng region of South Africa.
Lesotho has long been known as a source of large, high-quality diamonds, at least initially from alluvial deposits. Nevertheless, most of the country’s diamond assets have to date remained unexploited with the majority of construction having been derived from the Letseng-la-Terai deposit originally mined by De Beers between 1970 and 1981.
In total, there are 39 known kimberlite pipes and 366 kimberlite blows and dykes in the country of which 24 have been shown to be diamondiferous. Those that are considered significant include the nearby Kao, Lemphane and Mothae diamond pipes, as well as the Firestone-controlled Liqhobong pipes, all high in the Maluti Mountains.
Since gaining independence in 1966, Botswana has enjoyed Africa’s longest continuous multiparty democracy with free and fair elections held regularly in the country since 1965.
Botswana’s long standing political stability has helped drive the country’s economic success story as one of the fastest growing economies in the world with a growth rate averaging 7% from 1972 to1999. In recent years, the record GDP growth has been maintained with 7.2% growth in 2010 and estimated GDP growth in 2011 of 6.2%. Through fiscal discipline and sound management, Botswana has transformed itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of US$16,300 in 2011. Many credit rating agencies including Moody’s rate Botswana as the best credit risk in Africa with a rating of AAA, far higher than even that of Japan or Portugal.
Diamond mining has fuelled much of the country’s economic expansion and currently accounts for more than one-third of GDP, 70-80% of export earnings, and about half of the government’s revenues. Botswana is the world’s largest and lowest cost producer of diamonds with annual production worth over US$3 billion and is considered to be one of the most prospective countries in the world to explore for kimberlite, the primary rock for diamonds.