More Spending Cuts as Botswana Diamond Revenue Declines
August 24, 25
(IDEX Online) - Botswana's government has announced plans for further spending cuts as a result of declining diamond revenue.
Ndaba Gaolathe, the country's finance minister and vice president, told parliament last week that savings of BWP 5.5bn (USD 400m) had been achieved between November 2024 and June 2025, but "we must now move to further slow expenditure and cement fiscal consolidation".
Cuts so far have largely involved postponing less critical projects, and restructuring spending priorities.
Botswana's economic growth forecast for this year has been revised down to near zero from an earlier prediction of 3.3 per cent. The budget deficit is expected to rise to 7.56 per cent of GDP for the 2025-26 fiscal year.
Last month it devalued its currency for the second time in eight months, and warned it may have to do so again.
Botswana, the world's second biggest diamond producer by value, has been hit hard by the downturn in global demand for natural diamonds, and by sliding prices.
Diamond revenue at Debswana halved in 2024 and production for this year is expected to be down by as much as 40 per cent. It has paused production at flagship mines including Jwaneng and Orapa for three months.
Diamonds account for about 30 per cent of Botswana's total GDP and 70 per cent of its foreign exchange earnings.
Pic shows Ndaba Gaolathe.