Botswana Economy Hit by Diamond Slump
December 12, 24
(IDEX Online) - Botswana is braced for its worst economic downturn since the Covid crisis, amid the ongoing slump in demand for diamonds.
Finance Minister Ndaba Gaolathe this week warned that it could contract by 1.7 per cent this year as a direct result of the slump - compared to original projections in the February budget of 4.2 per cent growth.
But he predicted better times ahead, with an expected rebound in the diamond market driving overall growth of up to 5 per cent in 2025.
Gaolathe said Botswana, like other southern African countries, had been hit by the worst regional drought in decades, and had also been impacted by persistent defects in its major power plant.
Diamonds account for around 80 per cent of Botswana's export earnings and a third of total budget revenues.
Debswana - the joint venture between De Beers and the Botswana government - said sales for the first three quarters of 2024 were down by 52 per cent.
Pic shows a diamond sorter on the Bank of Botswana's 100 pula note.