KEY POINTS
- Botswana forecasts 3 percent to 4 percent growth for 2025.
- Diamond revenues are expected to narrow the budget deficit.
- Non-mining sectors are crucial to sustaining economic resilience.
Botswana’s economy is projected to rebound in 2025, with growth estimated between 3 percent and 4 percent, according to senior government officials.
This follows a contraction in 2024, largely due to declining diamond sales. Speaking at a budget workshop on Friday, Walter Matekane, Director of Macroeconomic Policy in the Ministry of Finance, highlighted improved prospects for the global diamond market and a steady rise in non-mining sectors as key factors behind the anticipated recovery.
“The domestic economy is expected to bounce back due to base effects, global recovery in major diamond export markets, and continued non-mining sector growth,” Matekane said.
Diamond revenues shape Botswana’s fiscal outlook
Botswana’s reliance on diamond exports remains a double-edged sword.
In 2024, weak diamond sales led Debswana, the joint venture between Botswana and De Beers, to reduce production estimates by 6 million carats, ending the year at 17.9 million carats. This decline significantly affected spending habits, and overall economic performance by the government.
The anticipated recovery in mineral revenues is expected to reduce the budget deficit from 6.75 percent of gross domestic product (GDP) in the 2024/25 fiscal year to 3.6 percent of GDP in 2025/26.
According to Reuters, Finance Minister Ndaba Gaolathe is set to deliver the 2025/26 national budget in February, which is expected to outline measures for economic stabilization.
Non-mining industries contribute to the country’s economy
Although diamonds remain the main income earner in Botswana, the government has endeavored to diversify the country’s economy.
Also, other sectors such as tourism and agriculture are expected to take over in the quest to power the progression of the country.
“Diversification remains crucial for long-term economic stability,” Matekane noted, adding that a balanced approach will help cushion the economy from external shocks.
Despite the challenges of 2024, Botswana’s economic resilience and strategic adjustments position the country for a stronger recovery in the coming year.
