Long hailed as Africa’s diamond darling and the poster child for fiscal prudence, Botswana is navigating a tricky transition.
After years of riding high on natural diamonds, the sparkle is fading fast.
Global shifts in demand – driven largely by the rise of synthetic stones, lingering reputational damage from the blood diamond era and changing trends in countries like China and India – have all hit Botswana hard.
“Diamond prices have been declining,” said Duncan Bonnett, a partner at Africa House.
“There seems to be a glut in the global diamond market. This is a real concern for a country like Botswana, where the economy is heavily dependent on diamonds and any change in demand has a significant impact.”
The falling market and sliding prices have already taken a toll. GDP contracted by 3% in the last financial year, while budget deficits have widened and government spending is under pressure in ways the country hasn’t seen in decades.
“The country has always prided itself on being a prudent spender and a reliable provider of services. It has traditionally avoided going to the markets for finance or taking on debt, so this marks quite a significant moment,” said Bonnett.
- Read the full article in our Freight Features edition on "Botswana."
