Diamonds and their revenues play a key role in helping to develop Africa. They have made—and continue to make—significant contributions towards development and prosperity in a number of countries in Africa and elsewhere in the world. As a natural resource, rough diamonds represent one of the main sources of revenue for many African diamond-producing countries and create livelihoods for millions of people. The revenues generated not only increase the overall standard of living, but also fund essential government services such as health, education and development programs.

The global diamond industry employs some 10 million people directly and indirectly all over the world, including Africa. The vast majority of the world's diamonds come from sources that use the revenues generated by diamonds to aid their national development. Given good governance and appropriate laws, diamonds are a vital source of revenue for building infrastructure and essential social services such as hospitals and schools.

"For our people, every diamond purchase represents food on the table; better living conditions; better healthcare; safe drinking water; more roads to connect our remote communities and much more."
- President Mogae of Botswana, June 7, 2006

Countries such as Botswana, Namibia and South Africa offer ongoing proof that diamond revenues can create sizeable benefits to the economy in countries where they are sourced. In these countries, diamonds have contributed to funding impressive economic growth and stability. Click on the map to the right to view the GDP for countries in Africa. These benefits are also evident in their rankings on the United Nations Human Development Index (HDI), a comparative measure of poverty, literacy, education, life expectancy, childbirth, and other factors for countries worldwide. Click on the map to the right to view the HDI for countries in Africa.

Revenue from diamonds assumes an increased importance in helping previously war-torn countries establish economic stability. In June, Liberia's recently democratically elected president, Ellen Johnson Sirleaf, called on delegates at a regional conference on the diamond trade to determine how mining can be used to decrease poverty, fuel economic growth and promote peace in the West African countries of Guinea, Liberia, Sierra Leone and the Ivory Coast.

Global communities broadly accept that the creation of a sustainable future for Africa lies in its ability to develop and maximize its natural resources. Diamonds play a major role in these efforts.

The diamond trade contributes approximately $8.4 billion per year to Africa. Following is a look at the impact diamond revenues have on some African countries' economies:

Diamonds account for 76% of Botswana's export revenue, 45% of the government revenue and 33% of the gross domestic product (GDP). Since the discovery of diamonds in Botswana in 1966, the GDP annual growth rate has averaged 7%. Debswana, a Botswana diamond company, is the largest corporate responsibility contributor to the socio-economic development of Botswana. Botswana has one of the fastest growing economies in the world, due in large part to diamonds. Without the legitimate diamond trade, Botswana would lose approximately $3 billion in revenue per year. This loss would impact everything, from spending on social programs to government investments in the country's infrastructure.

In the country of Namibia, diamonds represent approximately 10% of GDP, 40% of export revenue and 7% of the government's annual revenue. Namdeb, a diamond company in Namibia, is the largest corporate social responsibility contributor to the socio-economic development of Namibia. In 2006, Namibia will produce approximately $700 million dollars of diamonds.

South Africa will produce more than $1.5 billion in diamonds in 2006. Corporate social development projects receive millions of dollars of investments by diamond mining companies in South Africa. The Namaqualand Diamond Fund Trust which invests in community development projects, empowerment and sustainability initiatives received approximately US $4.8 million between March 2005 and March 2006 from the Trans Hex Group, a diamond exploration and mining company. The Fund has received a total of US $37.8 million from the Trans Hex Group since it started operating in 1994.

Other countries like Angola, Tanzania, the Democratic Republic of Congo and Sierra Leone also receive major economic benefits due to revenues from diamonds. For example, former war-torn Sierra Leone exported approximately $142 million worth of diamonds in 2005. These diamond revenue funds are helping to rebuild its infrastructure, health services and education systems.

Canada is the world’s third largest producer of diamonds producing an estimated C$1.5 billion worth of diamonds each year and the diamond mining industry in Canada employs thousands of people both directly and indirectly. Direct benefits will accrue to the federal Canadian government through royalties and business and personal income taxes from diamond mines. For example, Indian and Northern Affairs Canada estimates that over the life of the mines in the Northwest Territories (NWT), the Ekati, Diavik and Snap Lake projects will collectively generate royalties of C$1.6 billion, federal business taxes of C$2.6 billion, territorial taxes of C$1.3 billion, and employee and other business income taxes of C$4.7 billion (2004 estimated figures).
"A decade ago Canadian diamonds were only a gleam in a prospector’s eye. Today there are three producing mines and two more in development. And the Royal Bank predicts diamonds will bring over 30 billion pounds (almost C$70 billion) to the Canadian economy over the next 25 years."
- Prime Minister Stephen Harper of Canada, July 14, 2006

Across Canada, diamond exploration expenditures involving 123 companies reached C$251 million in 2005, which was primarily spent in the NWT, Nunavut, Saskatchewan, Quebec and Ontario. Between 1991 and 2002, diamond mining contributed C$2.9 billion or 83.3% of the total impact on NWT Gross Domestic Product (GDP). Exploration activities contributed another C$549.4 million or 15.8% of the total GDP.

Between 1998 to 2002, the peak growth period of the diamond industry, diamond exploration accounted for 23% of the total C$2.2 billion spent on exploration in Canada.

Between 1996 and 2002, the two operating diamond mines in NWT (Ekati and Diavik) spent C$3.4 billion on goods and services. Of this total, C$1.9 billion or 57% was with from northern businesses and 28%, or just under C$10 million, was with Aboriginal businesses in the north.
"The Northwest Territories Industrial Mining Skills Strategy directly opens the door to a wide range of rewarding careers in the mining industry and enables Aboriginal communities to take full advantage of the exciting employment opportunities arising in the NWT's expanding diamond mining industry. The diamond industry has given Aboriginal communities in the North plenty of optimism for the future."
- Honourable Ethel Blondin-Andrew , former Canadian Minister of State (Northern Development), February 3, 2005

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Creating Employment

The diamond industry provides livelihoods for millions of people around the globe. In southern Africa, for example, more than 38,000 people are directly employed by the diamond industry. In Botswana, the diamond industry is the country's second largest employer. And in South Africa, 28,000 people are employed in mining, sorting, valuing, cutting, polishing, jewelry retail and jewelry manufacture. These employment opportunities allow thousands of Africans to make a salary, obtain healthcare, create a better home environment, provide education for their children and much more. These jobs also supply subsequent indirect employment, expanding the communities around where diamonds are found and offering broader opportunities to the people of the communities.
"We know that diamonds are a valued source of employment, foreign exchange, tax revenue, new investments and play a positive role in enhancing the overall economic well being of countries and local communities."
- Thabo Mbeki, democratically elected President of South Africa

The diamond industry in Canada directly employs over 5,300 people and indirectly employs over 7,500 people. In fact, between 1991 and 2002, diamond mining generated 74% of the total impact on NWT employment. Exploration activities contributed another 23% of total employment impact. There are three producing diamond mines in the NWT and Nunavut, and one in the construction phase in the NWT. There is one diamond mine being built in Ontario, which will be the province’s first diamond mine.
"The Victor diamond project is great news for the people of Attawapiskat and the surrounding region. De Beers’ investment here means more than just new jobs. It will provide opportunities for families, local businesses and First Nation communities."
- Ontario Premier Dalton McGuinty, June 2006

In 2002, approximately 15% of total employment in the NWT was related to diamond mine operation and construction – that means more than one in seven NWT residents was working as a result of the diamond mining industry.

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Building Infrastructure

The revenues generated from the diamond trade also help build the countries they are in. For example, in 1966, there were only 3 miles of road in Botswana. Today, there are nearly 4,000, as well as a public transportation system. There is now a country-wide digital telephone network in Botswana, consisting of several thousand miles of fiber optic cable. These improvements were paid for, in part, by the revenues generated from the sales of diamonds. Now that travel and communications have improved, the people in Botswana have better access to better employment opportunities, healthcare facilities, schools, and cities. These improvements to the country's infrastructure also pave the way for continued economic opportunity and development in the future.

What are Conflict Diamonds?

Conflict diamonds are diamonds illegally traded to fund conflict in war-torn areas, particularly in central and western Africa. The United Nations (UN) defines conflict diamonds as "...diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council." These diamonds are sometimes referred to as "blood diamonds."
Background

Conflict diamonds captured the world's attention during the extremely brutal conflict in Sierra Leone in the late 1990s. During this time, it is estimated that conflict diamonds represented approximately 4% of the world's diamond production. Illicit rough diamonds have also been used by rebels to fund conflicts in Angola, Liberia, Ivory Coast, the Democratic Republic of Congo and the Republic of Congo (also known as Congo Brazzaville). (read more)

Today, the flow of conflict diamonds has been reduced to considerably less than 1%.

There are three diamond producing countries that account for this small percentage. Firstly, the Republic of Congo has been suspended from participation in the Kimberley Process owing to areas of non-compliance. Secondly, Liberia and the Ivory Coast are under United Nations Security Council Resolutions to prohibit the extraction and trading of diamonds. Despite both the Republic of Congo and Liberia benefiting from internationally recognized peace agreements, diamonds from these countries may be referred to as "conflict diamonds". (read more)
Eliminating Conflict Diamonds

In July 2000, the global diamond industry made clear to the international community its zero tolerance policy towards conflict diamonds. Dedicated to eradicating the trade in conflict diamonds, it worked closely with the United Nations, governments and non-governmental organizations (NGOs) such as Global Witness and Partnership Africa Canada to create the Kimberley Process Certification System. This system was formally adopted in 2003 and guards against conflict diamonds entering the legitimate diamond supply chain. The diamond industry also adopted a voluntary System of Warranties to assure consumers that their diamonds are from sources free of conflict.

Today 71 governments have enshrined into their national law the Kimberley Process Certification System, and now more than 99% of the world's diamonds are from conflict free sources. However, even one conflict diamond is one too many. The diamond industry continues to work with governments, NGOs and the UN to strengthen the Kimberley Process and the System of Warranties.

While diamonds have been used to fund conflict, the problem is not the diamonds themselves but the rebels who exploit diamonds (along with other natural resources) to achieve their illicit goals. The vast majority of diamonds come from countries at peace. These countries have been able to invest the revenue from diamonds into the development of infrastructure, schools and hospitals for the good of the communities in which diamonds are found. These countries include Australia, Botswana, Canada, Namibia, Russia, South Africa and Tanzania.

Today, more than 99% of the world's diamonds are now from conflict free sources and are officially traded under the UN mandated Kimberley Process. (read more)
"Diamonds are a unique resource, evoking beauty and eternal love. In recent years, pictures of maimed children have threatened to overwhelm these traditional positive images, when rebel groups in Africa used diamonds to finance their wars and unspeakable brutalities against civilian populations. Aroused by these conflicts, the international community mobilized to ensure people living in countries with abundant diamond deposits receive the benefits of their patrimony.

Outraged in the late 1990's that proceeds from diamond sales financed arms purchases and prolonged insurrections, in Sierra Leone and Angola, which were some of the most brutal of the past decade, the international community acted. By 2003 the international community through the participants in the Kimberley Process, bringing together industry, governments and civil society, mobilized governments to ban trade in rough diamonds funding African conflicts. Called the "Kimberley Process Certification Scheme" the ban ended those African conflicts financed by "blood" diamonds. Based on the respect for human dignity, the negotiators found the following common interests to win support for an international ban on trade in rough diamonds used to finance war and rebellion:

* First, in memory of those who died in Sierra Leone, in Angola, in the Democratic Republic of the Congo and other African countries in conflicts fueled by rough “Conflict’ Diamonds;”
* Second, to end the killing in on-going conflicts in Africa;
* Third, to save the children of Africa whose lives would be threatened by future conflicts fueled by conflict diamonds;
* Fourth, to ensure those countries which depend on diamonds for their development and economic well-being will benefit from their patrimony; and
* Fifth, to assure consumers the diamonds they wish to enjoy are without the taint of conflict.

Through the worldwide implementation of the Kimberley Process Certification Scheme we have begun to fulfill the international community's obligation to those who have suffered in Africa's wars by banning the trade in conflict diamonds. We have eliminated conflict diamond financing in Sierra Leone and are committed to bring the proceeds from the diamond trade to benefit the people of Sierra Leone, Angola and Liberia as well as all other diamond producing countries such as Botswana to help themselves support economic development of their countries."
- Ambassador J.D. Bindenagel, Former U.S. Special Negotiator for Conflict Diamonds
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