The International Monetary Fund has issued a stark warning to Botswana’s leadership, advising against expanding their stake in the diamond behemoth De Beers through Debswana. This cautionary stance emerges as the southern African nation grapples with economic turbulence and an overwhelming dependence on diamond revenues.

Currently maintaining a modest 15% interest in De Beers, Botswana’s government harbors ambitions to secure majority control as Anglo American divests its commanding 85% position. The acquisition has also caught the attention of regional players Angola and Namibia, who are eyeing participation in this high-stakes transaction. However, the IMF’s latest assessment strongly discourages such expansion, citing the nation’s precarious fiscal position and dangerous over-reliance on diamond exports.

Economic Storm Clouds Gathering

The Fund’s analysis reveals a troubling landscape where natural diamond demand has collapsed more severely and persistently than anticipated. This market deterioration triggered a devastating economic contraction in 2024, unleashing a cascade of problems including soaring youth joblessness and widening fiscal and trade imbalances.

Looking ahead, the IMF forecasts continued economic decline driven by diminishing diamond production and broader sectoral slowdowns, painting a sobering picture of Botswana’s immediate future. The warning underscores the critical need for economic diversification in a nation where diamond fortunes have long dictated national prosperity.