S&P Global Ratings has revised Botswana’s economic outlook to negative from stable, citing external and fiscal pressures. The agency confirmed its ’BBB+/A-2’ long- and short-term sovereign credit ratings for the country. The decision reflects the challenges Botswana faces due to decreased global demand and prices for diamonds, which are pivotal to its fiscal revenues and exports.

Botswana’s economy is heavily reliant on diamonds. They account for around 80 per cent of its export earnings and a third of total budget revenues.

De Beers and the Botswana government finally reached agreement last month on the long-term mining and rough sales deals, but sales by their joint venture, Debswana, were down by 52 per cent for the first three quarters of 2024, and there a few signs of a sustained recovery in demand.

The agency projects that without a significant fiscal effort by the government or a substantial increase in diamond prices and sales volumes, Botswana’s fiscal consolidation efforts will remain challenging. It forecasts government debt, net of liquid assets, to rise to 19% of GDP by 2028 from 3% in 2024.