DiamondBuzz
Botswana braces for economic downturn as diamond slump persists
Botswana’s economy faces a economic downturn with the government now projecting a 0.9% GDP contraction amid a protracted diamond sales downturn. Finance Minister Ndaba Gaolathe highlighted this grim outlook, stating, “The macroeconomic picture for the full year remains fragile, driven by persistent weakness in the diamond sector.”
This forecast marks a sharp reversal from earlier optimism. After a 3.0% GDP contraction in 2024—following 2.7% growth the year prior—Gaolathe’s February budget had anticipated a robust 3.3% expansion. Rough diamonds, which underpin over a third of GDP, nearly all export revenues, and 40% of government income, have instead triggered this slide.
Compounding the pressure, global ratings agencies Moody’s and S&P recently downgraded Botswana’s credit profile, citing plummeting production and sales volumes.
DiamondBuzz
Botswana Looks Beyond Rough Diamond Sales, Eyes U.S. Jewelry Market
The Duty Exemption By US Presents An Opportunity For Domestic Jewelry Manufacturers In Gaborone To Bypass Traditional Middle-Market Hubs and Establish A Direct Pipeline To American Consumers
Grappling with a painful downturn in global rough-diamond demand, Botswana is pivoting its economic strategy: expanding up the supply chain directly into American retail shelves while leveraging its resource wealth to fund conservation and diversification.
Speaking on the sidelines of New York Climate Week, Bogolo Joy Kenewendo, Botswana’s Minister of Minerals and Energy, highlighted the southern African nation’s plan to capitalize on a 0% import-tariff rate to the U.S. market. The duty exemption presents an opportunity for domestic jewelry manufacturers in Gaborone to bypass traditional middle-market hubs and establish a direct pipeline to American consumers.
shift The push into value-added manufacturing comes as the world’s top diamond producer by value navigates a broader structural Diamond revenues have long formed the bedrock of Botswana’s post-independence balance sheet, underwriting universal secondary education and tuition-free university funding. However, recent market volatility has underscored the vulnerabilities of a mono-sectoral economy.
Under the Botswana Economic Transformation Programme (BETP)—an initiative spearheaded directly by President Duma Boko and his vice president—the government is directing resources toward manufacturing, agriculture, and broader mining sectors to reduce its heavy reliance on rough diamond sales.
To support its luxury exports, Botswana is recalibrating its brand narrative around origin, environmental stewardship, and social impact. The country recently announced a five-year extension of the “Okavango Eternal” partnership alongside De Beers Group and the National Geographic Society. The initiative aims to protect the ecological integrity of the Okavango River Basin while tying diamond purchases to conservation efforts.
With De Beers currently facing an impending ownership change, officials remain optimistic that any capital restructuring could bring additional funds into Botswana to accelerate its domestic economic transition.
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