Here’s an up-to-date look at Botswana’s trade and economic situation in 2025, with a particular focus on minerals and overall economic health:
Mineral Trade: Diamonds Still Dominant, Facing Headwinds
Diamond exports, making up roughly 80% of Botswana’s export revenues and contributing about 25–30% of GDP, have suffered lately due to weak global demand and price declines, exacerbated by competition from lab-grown stones. Debswana, the government/De Beers joint venture, cut production by 27% in 2024 and plans a further 16% reduction to around 15 million carats in 2025. To extend the life of its flagship Jwaneng mine, Debswana is investing in an underground operation with a projected capital increase from BWP 5 billion to BWP 8 billion annually. They're now seeking international credit access with a planned credit rating. The new 10‑year deal with De Beers not only extends mining rights to 2054 but also increases Botswana’s share of diamond revenues from 30% rising to 40/50% over time.
Diversification Beyond Diamonds
Other mineral sectors—coal (notably in Mmamabula), copper, nickel, silver, uranium, soda ash, and more—are being actively developed, although still small compared to diamonds. The Mmamabula–Lephalale Railway proposal aims to boost coal exports via South Africa's ports, targeting 24 million tonnes per year, but remains in feasibility/planning at this time.
Trade Balance & Economic Indicators
Botswana recorded a substantial trade deficit of BWP 37.3 billion in 2024, with exports at BWP 59.7 billion vs. imports of BWP 96.9 billion. Diamonds, fuel, and food remained major import categories. In 2024, exports dropped 44% YoY in key months; copper and machinery featured in the export mix alongside diamonds. The current account deficit widened to roughly USD 391 million (± 2% of GDP) in 2024 but is projected to return to small surplus territory (± 1.3% of GDP) through 2025–27 as mineral earnings recover.
Fiscal & Economic Outlook
After a sharp 3% GDP contraction in 2024, Botswana’s IMF-estimated economy may contract another ± 0.4% in 2025, with government projecting near-zero growth. The government’s budget deficit for 2024/25 widened, with public debt still managed at sustainable levels (± 22% of GDP). Inflation and monetary policy remain stable: ± 5% inflation in 2023, policy rate held near 2 to 2.4% . Foreign reserves remain strong (8 months import cover, $4.8B), partly thanks to the Pula Sovereign Wealth Fund.
Socio-Economic Challenges Ahead
Unemployment, particularly among youth, hovers around 25–27%, with public frustration growing over lack of jobs. Economic growth remains fragile and heavily commodity-dependent, prompting renewed emphasis on diversification—targeting tourism, agriculture, processing, manufacturing, and financial services. Politically, the October 2024 election ushered in a new government under Duma Boko, pledging to create jobs, diversify exports, formalize economic reforms, and build a new sovereign wealth fund.
Summary Outlook for 2025
We can expect stagnant or marginally negative GDP in 2025 as the diamond industry continues its weak phase. A modest export rebound is possible if diamond markets recover in late 2025/early 2026. Mineral diversification efforts are gaining traction but face hurdles: infrastructure, capital, and global market dynamics. Fiscal health is sound, with low debt and ample reserves, but sustainability hinges on better export performance and spending discipline. Social and economic resilience depends on success in job creation and private-sector development, critical for political and societal stability. Botswana stands at a strategic inflection point in 2025: driven by the slow recovery of its cornerstone industry and deepening diversification efforts, with economic stability supported by strong institutions, but shadowed by pressing social challenges.