Botswana‘s economy is planning to recover in 2025, after a challenging 2024, with projected growth of 3% to 4%. Walter Matekane, Director of Macroeconomic Policy at Botswana’s Ministry of Finance, shared this optimistic forecast during a recent budget workshop. The recovery in global diamond markets and the sustained growth in the non-mining sector have driven the revival.
Economic Challenges in 2024
In the first three quarters of 2024, Botswana’s economy contracted 3.3%, exceeding earlier predictions of a 1.7% contraction. This downturn was driven by weak diamond sales, with Debswana, a joint venture between Botswana and De Beers, reducing its production target to 17.9 million carats, a 6 million carat drop. The declining revenues constrained government spending and led to an expanded budget deficit.
Factors Driving the 2025 Economic Recovery
Botswana’s economic growth in 2025 will be driven by a recovering global diamond market, increasing revenues as one of the world’s top diamond exporters. Moreover, diversification efforts are also paying off, with non-mining sectors like tourism and agriculture reducing reliance on diamonds. Additionally, improved fiscal management is expected to narrow the budget deficit from 6.75% of GDP in 2024/25 to 3.6% in 2025/26, strengthening economic stability.
Looking Ahead: 2025/26 National Budget
Botswana’s Finance Minister, Ndaba Gaolathe, is ready to present the 2025/26 national budget in February. Moreover, the key priorities are expected to include increasing non-mining sectors. Thus, addressing fiscal challenges, and supporting long-term economic diversification.
