In the first quarter of 2024, Botswana’s economy saw a sharp contraction of 5.3%, in stark contrast to the 5.3% growth recorded in the same period last year. This downturn was mainly due to a significant global decline in diamond demand, a sector critical to Botswana as it accounts for 80% of the country’s export revenue. Statistics Botswana reported a steep 27.3% drop in diamond production.
Specifically, the real value added by diamond traders fell sharply by 46.8%, contrasting with a 3.7% increase in the previous year. The mining and quarrying sector, another key component of Botswana’s economy, also experienced a substantial decline with a 24.8% reduction in real value.
The overall GDP contraction was driven largely by declines in crucial sectors such as diamond trading, mining & quarrying, water & electricity, and manufacturing, as highlighted in the report. On the other hand, other industries managed to maintain positive growth rates, exceeding 0.5%.
Earlier forecasts from Botswana’s central bank had projected a 4.2% economic growth target for the year, but this goal is now at risk due to the current economic challenges.
Botswana, known for having the highest per capita GDP among African nations, attributes much of its economic strength to diamond production. This revenue source supports various national initiatives, including the provision of free education to its 2.3 million population.
