Botswana Diamond Stockpile Nearly Doubles Target Level Amid Prolonged Price Slump
Botswana’s diamond stockpile has grown to nearly double its target inventory level as persistently low prices continue to limit production growth, constraining the country’s ability to stimulate economic activity in the short term, the finance ministry has said.
According to the ministry, Botswana’s economy is expected to contract by almost 1% in 2025, following a 3% decline in 2024, largely as a result of depressed diamond prices. The downturn has been driven by rising competition from lab-grown diamonds and subdued global demand.
The prolonged price slump forced Debswana—Botswana’s joint venture with De Beers, which accounts for about 90% of the country’s diamond sales—to temporarily suspend production at some of its mines last year.
Despite these challenges, Botswana produced 18 million carats of diamonds in 2024, making it the world’s second-largest producer after Russia, according to the Kimberley Process Certification Scheme.
However, the finance ministry said Botswana held a diamond stockpile of 12 million carats at the end of December 2025, nearly double the government’s allowable inventory level of 6.5 million carats, according to its 2026/27 Budget Strategy Paper.
“This suggests that, over the short term, production is expected to remain broadly unchanged until the level of inventories is drawn down closer to minimum allowable levels, creating room for additional production,” the ministry said.
The limited scope for increasing diamond output is expected to weigh on economic growth unless the non-mining sector delivers a strong performance.
Diamonds typically contribute about one-third of Botswana’s national revenue and approximately three-quarters of its foreign exchange earnings, underscoring the sector’s importance to the economy.
Adding to the pressure, Botswana’s exports to the United States, including diamonds, are now subject to a 15% tariff.
The ministry warned that higher tariffs in major diamond-consuming markets such as India could further depress prices and squeeze profit margins.
“This may ripple through to mining operations. A slowdown in mining activity would reduce government fiscal revenues from the sector,” the ministry said.
Mineral revenues are forecast to reach 10.3 billion pula ($729.24 million) in 2025/26, significantly below the historical annual average of 25.3 billion pula, reflecting the ongoing weakness in diamond sales.
