Botswana’s diamond industry is facing a significant downturn, with the country set to cut back its 2025 diamond output by 16% compared to the previous year. This decline is attributed to falling global demand for diamonds and the increasing popularity of lab-grown diamonds, a cheaper alternative. Diamonds account for 80% of Botswana’s export revenue, making this situation particularly challenging for the country’s economy.
Debswana, Botswana’s largest diamond production company, accounting for 90% of sales, saw its revenue drop by almost half last year. In response to weak global demand, Debswana temporarily paused production at its flagship Jwaneng mine and the Orapa mines, the world’s largest by area. According to Botswana’s president, one potential solution to boost the economy is to polish and cut diamonds locally instead of exporting them raw.
This move could add value to the diamonds and create more jobs in the country. However, Botswana’s economy will likely need to diversify its revenue streams further to regain stability. The country’s heavy reliance on diamond exports makes it vulnerable to fluctuations in the global market.
Botswana’s economic situation highlights the importance of diversification. By developing other industries, such as tourism or manufacturing, the country can reduce its dependence on diamonds and create a more sustainable economy. As the global diamond market continues to evolve, Botswana must adapt and find new ways to remain competitive.
The president’s initiative to promote local diamond polishing and cutting is a step in the right direction. By adding value to its natural resources, Botswana can increase its revenue and create more economic opportunities for its citizens. Nevertheless, a long-term strategy for economic diversification will be crucial to ensuring the country’s stability and growth in the face of a changing global market.