Botswana’s mineral sector is expected to experience slower growth in 2024 compared to the previous year, primarily due to a decline in diamond production.
On July 13, the International Monetary Fund (IMF) revised Botswana’s growth forecast for 2024 from 3.6% to 1%, as reported by Mines.cd.
This decline is anticipated to lead to a budget deficit increase from 3.45% to 6%, attributed to reduced revenue from mineral resources.
In response to these challenges, the IMF has advised Botswana to slow down new infrastructure projects to mitigate the economic impact. The ongoing economic slowdown is largely a result of decreased diamond production.
The IMF’s statement emphasized that “budgetary easing is warranted this year due to the drop in mining revenues.
However, the execution of the ambitious capital budget should be slowed to limit the deficit and prioritize projects with the highest returns.”
Factors such as declining consumer demand and global economic weakness have contributed to a reduced outlook for diamond demand.
Botswana’s Finance Minister, Peggy Serame, had projected in February that the economy would grow by 4.2%.
However, shortly thereafter, the central bank indicated that this target might be difficult to achieve due to anticipated global constraints in the diamond sector.
As the second-largest producer of gem-quality diamonds globally—behind only Russia—Botswana contributes between 30% and 40% of global diamond turnover. The country produces over 30 million carats annually, accounting for nearly 20% of global production.
Diamond mining in Botswana began in the 1950s, and the country remains a leading player in the diamond industry in terms of value.
