Botswana faces diamond sector crisis as exports halve in 2024

Botswana, one of the world’s leading diamond producer by value, is grappling with a severe downturn in its diamond industry. Between January and October 2024, rough diamond exports plummeted by 50%, totaling 22.7 billion pesos compared to 45.2 billion pesos during the same period in 2023, according to a report from the Central Bank.

Debswana, a key player in the sector responsible for 95% of the country’s annual production and a partner of De Beers and Okavango Diamond Company, has experienced a dramatic decline in average monthly sales. Figures dropped to 2.3 billion pesos, nearly half of last year’s 4.5 billion pesos.

The crisis has been exacerbated by De Beers’ strategic decision to cut production in an attempt to manage surplus inventory.

This, combined with sluggish demand, has led to troubling economic forecasts. Botswana’s economy is now expected to contract by 1.7% in 2024.

Finance Minister Ndaba Gaolathe has warned that pressures on the diamond market may persist into mid-2025, despite anticipated year-end boosts from marketing efforts.

The newly elected government is closely monitoring the situation, given the diamond sector’s critical role in funding national development programs.

Although Botswana produced $4.7 billion worth of diamonds in 2023, stabilizing prices and reducing stockpiles remain essential hurdles for economic recovery.

As global market conditions evolve, Botswana’s diamond industry faces an urgent need to adapt and reignite its growth trajectory.