Once held up as a model of African economic success, Botswana has been going through its worst downturn in a generation since 2023. Diamonds, which account for a third of government revenue and a quarter of GDP, are losing value fast as global demand cools and lab-grown stones eat into the market.
Rough diamond prices fell from $128.80 a carat in 2024 to roughly $99.30 expected in 2026. Debswana, the joint venture with De Beers, cut production by 27 percent in 2024 alone. The fallout: nearly 12 million unsold carats sitting in stockpile by the end of 2025, and a $3.7 billion hit to diamond reserves in a single year.
The economy shrank 3.1 percent in 2024, then another 0.4 to 0.7 percent in 2025. Public debt nearly doubled, climbing from 22 to almost 40 percent of GDP between 2023 and 2025, while the pula has lost 6 percent of its value against the dollar since July 2025.
There are signs of a turnaround in 2026, though. Production jumped 148 percent in the most recent quarter, and Debswana raised its annual target from 15 to 18 million carats. The IMF is now forecasting a return to growth, around 2.3 percent.
Faced with this instability, President Duma Boko’s government is pushing structural diversification: a sovereign wealth fund modeled on Norway’s, a citizenship-by-investment program, mining exploration expanded across 70 percent of unexplored territory, and a push into tourism, renewables, and digital services.
The real test still lies ahead — turning an increasingly unpredictable mineral windfall into a diversified economy that can create jobs and hold the country’s social stability together, without leaning on a single stone.