(Bloomberg) -- Botswana’s leader conceded defeat after his party was trounced in parliamentary elections amid an economic slump, a shock outcome that ends its 58-year grip on power.
President Mokgweetsi Masisi’s Botswana Democratic Party paid the price of a downturn triggered by a collapse in the diamond market, which generates the bulk of government revenue and export earnings, and has left the country with a 28% unemployment rate. High levels of crime and corruption have also fueled public anger and led to growing disaffection with democracy.
Partial results released on Friday showed the Umbrella for Democratic Change, an opposition coalition led by Harvard-trained human rights lawyer Duma Boko, securing 26 seats in Botswana’s 61-seat legislature and on course to win a majority. The Botswana Congress Party won seven seats, the Botswana Patriotic Front — aligned to former President Ian Khama five and Masisi’s party just three.
“I will respectfully step aside,” Masisi said in remarks broadcast on state television in the capital, Gaborone, on Friday. “I wish to congratulate the opposition. I respect the will of the people.”
While Botswana has long been held up as one of Africa’s most successful democracies, satisfaction with the system has collapsed, an Afrobarometer survey published in July shows. Just 30% of respondents in the country expressed satisfaction with democracy, down from 70% a decade ago — which was among the sharpest drops on the continent.
Similar patterns have emerged elsewhere in the region, including neighboring South Africa, where the African National Congress in May lost the parliamentary majority it’s held since the end of apartheid three decades ago.
Final results from Botswana’s Nov. 30 vote are expected later on Friday. Under the constitution, the party that controls parliament has the right to select a president and form a new government.
The BDP, which has ruled Botswana since the country gained independence from Britain in 1966, held 38 seats in the previous parliament and was widely expected to retain its majority.
Botswana is the world’s largest producer of rough diamonds by value, with almost all of its gems mined by Debswana — which is jointly owned by the government and De Beers, a unit of Anglo American Plc. Global diamond sales have been impacted by oversupply, poor demand from the crucial Chinese market and pressures from lab-grown gems.
Masisi’s administration last year negotiated a new 10-year accord with De Beers that will give the nation access to more diamonds and help it secure 10 billion pula ($749 million) in development funding.
Boko criticized a lack of transparency surrounding the deal, but hasn’t indicated whether he wants it renegotiated. In a July interview, he said he wants Botswana’s government to increase its stake in De Beers to 51%, from 15% currently, and that other investors could hold the balance of the shares.
Anglo American paid $5.1 billion for the Oppenheimer family’s 40% stake in De Beers in 2011.
In February, Anglo American wrote down the value of its 85% share in the diamond producer by $1.6 billion to about $7 billion, and in May it put the unit up for sale after fending off a $49 billion takeover bid from BHP Group Ltd.
“It is an opportunity for the government of Botswana, in our view, to acquire a substantial controlling stake in De Beers,” Boko said in the interview. “When it’s in some crisis, it’s normally the best time to acquire.”
Boko also wants De Beers to move its headquarters from London to the capital of Botswana, which is where it mines more than two-thirds of its diamonds.
The relocation would stimulate the local economy and “make Botswana truly a diamond country,” he said.
--With assistance from Matthew Hill, Monique Vanek and Arijit Ghosh.
(Updates with latest results in third paragraph, comment by opposition leader starting in 11th.)
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