Botswana


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By volume, Botswana is the largest diamond producer in the world. Diamond mining fuels Botswana's economy (they contributed 70 percent to total exports in 2011), making it vulnerable to fluctuations in the global demand for luxury goods. Mineral resources also include copper, nickel, gold, and coal, and accounted for 9 percent of the country's total export earnings in 2011.


Botswana's Performance on the Resource Governance Index

Botswana received a "weak" score of 47, ranking 30th out of 58 countries, due to a "failing" score for Reporting Practices and "partial" scores for the other components.

Rank
(out of 58)
Score
(out of 100)
30 Composite Score 47
41 Institutional & Legal Setting 55
Freedom of information law 0
Comprehensive sector legislation 100
EITI participation 0
Independent licensing process 83
Environmental and social impact assessments required 50
Clarity in revenue collection 50
Comprehensive public sector balance 67
SOC financial reports required 0
Fund rules defined in law 100
Subnational transfer rules defined in law 100
50 Reporting Practices 28
Licensing process 33
Contracts 0
Environmental and social impact assessments 0
Exploration data 50
Production volumes 50
Production value 33
Primary sources of revenue 67
Secondary sources of revenue 25
Subsidies 0
Operating company names 33
Comprehensive SOC reports 17
SOC production data 29
SOC revenue data 10
SOC quasi fiscal activities 33
SOC board of directors 50
Fund rules 0
Comprehensive fund reports 33
Subnational transfer rules 100
Comprehensive subnational transfer reports 0
Subnational reporting of transfers 0
30 Safeguards & Quality Controls 53
Checks on licensing process 0
Checks on budgetary process 67
Quality of government reports 67
Government disclosure of conflicts of interest 100
Quality of SOC reports 50
SOC reports audited 33
SOC use of international accounting standards 100
SOC disclosure of conflicts of interest 0
Quality of fund reports 33
Fund reports audited 83
Government follows fund rules 67
Checks on fund spending 0
Fund disclosure of conflicts of interest 100
Quality of subnational transfer reports 0
Government follows subnational transfer rules 100
8 Enabling Environment 69
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 81
Open Budget (IBP Index) 60
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 70
Government effectiveness (WGI) 67
Rule of law (WGI) 68
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 41st/58, Score: 55/100) learn more

Botswana has comprehensive legislation governing the mining industry, but lacks effective revenue reporting policies, contributing to a "partial" score of 55.

The Botswana Unified Revenue Service (BURS) collects taxes, while the Department of Mines collects mineral royalties and regulates the industry. For non-diamond minerals, licenses are awarded on a first-come, first-served basis. However, the Mines and Minerals Act does not apply to the licensing process for diamonds, which is subject to direct negotiation without restrictions or transparency. Recent attempts to pass a freedom of information law have failed.

Reporting Practices (Rank: 50th/58, Score: 28/100) learn more

With no public information on contracts or environmental impact assessments and incomplete data on critical revenue indicators, Botswana received a "failing" score of 28.

BURS reports mineral revenue, but bundles royalties and dividends together as one statistic. It also publishes information on production volumes and the value of resource exports in annual reports audited by the Office of the Auditor General. The Department of Mines' latest publication on revenue is from 2008 and includes production volumes, the names of companies operating in the country, company-by-company production data, and royalty receipts. The central bank publishes statistics on the value of resource exports, estimates of investment in mining development, license fees, and aggregated figures for all revenues received from mining, including taxes, dividends, and royalties.

Safeguards & Quality Controls (Rank: 30th/58, Score: 53/100) learn more

Botswana's "partial" score of 53 reflects a general lack of government oversight of the mining sector.

There is no legislative review of the licensing process, and commercial confidentiality regulations prohibit parliamentary committees from overseeing negotiations between the Mines Ministry and diamond companies. There is no legal mechanism for appealing licensing decisions.

The Mines Ministry's financial reports are audited and presented to Parliament, but legislative oversight of the budgetary process tends to focus on expenditures rather than revenues. Officials involved in monitoring the mining sector are required to disclose information about their financial interest in extractive activities.

Enabling Environment (Rank: 8th/58, Score: 69/100) learn more

Botswana performed best on this component, with a "partial" score of 69. The country received relatively high rankings on corruption control, accountability, and democracy.


State-Owned Companies (Rank: 32nd/45, Score: 32/100) learn more

Debswana is a 50/50 joint venture between the state and DeBeers. It effectively dominates the diamond industry but has no legal monopoly. Debswana publishes annual reports, which include the names of subsidiaries and mining operations but no financial figures. The government does not report its share of Debswana's revenues either, suggesting that these funds bypass the treasury.

Natural Resource Funds (Rank: 10/23, Score: 52/100) learn more

The Pula Fund is a sovereign wealth fund managed by the Bank of Botswana. It receives part of the government's income from diamond exports as well as excess foreign exchange reserves. The bank, in collaboration with the government, has complete discretion over deposits and withdrawals. Government deposits and the fund's foreign currency holdings are included in the bank's financial statements, but no other data are available.

Subnational Transfers (Rank: 20/30, Score: 50/100) learn more

The central government provides a substantial portion of local governments' revenues, distributing funds based on individual community needs. The government publishes no formula, specific rule, or general information on these transfers.

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