Botswana plans to reduce spending on new vehicles and travel for government officials and may delay some capital projects due to a slump in diamond revenues, according to Finance Minister Peggy Serame.
“We have to seriously reduce the pace of spending, and we are looking at areas such as procurement of vehicles, computers, workshops, and travel that is funded by the government,” Serame told lawmakers on Monday.
In the first quarter of the fiscal year starting in April, budget revenue was about 28% lower than the targeted 23.4 billion pula, primarily due to reduced diamond revenues and sales, Serame said.
“If things do not improve, we will also have to look at delaying some projects that we had planned,” she added.
Botswana is the world’s largest producer of rough diamonds by value, with these revenues constituting a significant portion of the southern African country’s budget.
However, global diamond sales have been affected by an oversupply, weak demand from the key Chinese market, competition from lab-grown gems, and inflation-weary consumers.
These budgetary challenges arise as the nation prepares for its October elections, where President Mokgweetsi Masisi is seeking reelection.
