The African Development Bank (AfDB) has approved a $304 million loan to support Botswana’s efforts to stabilise its public finances and implement key economic and governance reforms amid falling diamond revenues.

It marks a critical intervention in the country’s ongoing struggle with fiscal instability, primarily driven by a sharp decline in diamond revenues. This analysis examines the context, intent, and expected impact of the loan, as well as the broader economic challenges facing Botswana.

The loan aims to help Botswana navigate a widening fiscal deficit—expected to hit 6.7% of GDP this year—after the economy shrank by 1.7% in 2024, largely due to subdued global demand for diamonds, which account for around 80% of the country’s exports.

The $304 million loan is structured as a one-year general budget support operation for the 2025/26 fiscal year, under the Governance and Economic Resilience Support Programme (GERSP). The program is designed to address two main objectives:

Strengthening fiscal sustainability and transparency: Measures include boosting domestic revenue collection, curbing illicit financial flows, and enhancing the efficiency and accountability of public spending.

Stimulating inclusive economic growth: The program supports micro, small, and medium enterprises (MSMEs), with a particular focus on businesses owned by women and youth, to foster job creation and reduce inequality.

Diamond manufacturers in Surat, India’s diamond polishing hub, have begun implementing summer shutdowns for the first time in years as demand for natural stones remains persistently weak and the threat of steep U.S. tariffs looms over the industry.

Traditionally, factories in Surat—home to nearly 4,000 diamond units—take their main annual break during Diwali, remaining operational through the summer months. However, the ongoing downturn has prompted many units to extend Diwali closures and introduce unpaid summer breaks, a move not seen in previous years.

Around 10% of Surat’s diamond factories have declared a summer holiday of at least 15 days, with some major units planning to stay shut until June 6, according to industry sources and local media reports. The closures have triggered an exodus of thousands of migrant workers, many of whom are returning to their hometowns in Saurashtra and North Gujarat as operations wind down.

De Beers aims to open 100 Forevermark stores in India by 2030, as it taps into the world’s second biggest market for natural diamond jewelry after the US.It expects demand in India, currently at around $10bn, to double in that time.

De Beers plans to open 15 of its prestige Forevermark stores in Delhi and Mumbai in 2025, with a goal of reaching 100 stores in 40 cities by 2030.

India’s natural diamond jewellery market is currently valued at around $10 billion and is expected to double to $20 billion by 2030, with an annual growth rate of about 12%. This robust growth is fueled by rising incomes, a young population, increasing financial independence among women, and a cultural affinity for jewellery.

The aggressive expansion by De Beers and other major players is expected to accelerate the penetration of diamond jewellery in India, which, while growing, still lags behind gold in terms of household adoption.

Al Cook, the company’s CEO, , said: “We’re very confident in the future of India. It has become the second largest market for natural diamond jewellery globally, overtaking China last year.”We’ve seen double-digit growth for the last few years, and we actually see natural diamond demand in India, which is growing at 12 per cent annually, to double over the next five years by 2030.”