Botswana’s economy is forecast to shrink by 0.9% this year, the country’s finance minister said, amid a prolonged downturn in the diamond market.
Botswana, the world’s largest producer of diamonds by value, relies on the precious stones for around one-third of its national revenues and three-quarters of its foreign exchange receipts. The economic struggles have hit public services hard, leading the government to declare a national health emergency in August.
President Duma Boko had promised to reduce Botswana’s reliance on diamonds before taking office at the end of last year. But the stones remain a priority. Gaborone is working on acquiring a majority stake in the diamond company De Beers — to increase its current 15% hold by buying shares from Anglo American — despite the IMF warning it could be a risky endeavor given the current diamond market. Angola’s state-owned diamond producer is also vying for a controlling stake.