DailySun
The economy of Botswana is anticipated to contract by 1.7% this year, largely due to a persistent drop in diamond sales, as stated by Finance Minister Ndaba Gaolathe.
In a cautionary address to lawmakers on Thursday evening, Gaolathe, who is also the vice president, pointed out that the economy is confronted with additional challenges that could intensify what may become the most severe downturn since the COVID-19 pandemic in 2020.
“These challenges include possible further disruptions in the diamond market, extreme weather events such as droughts, floods, and cyclones, along with ongoing issues related to our primary power station,” he remarked.
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Initially projected to expand by 4.2% this year, up from 2.7% in 2023, the economy is anticipated to recover in the next year, targeting a growth rate between 4% and 5%, Gaolathe mentioned.
“This optimism is in line with expected global recovery trends, particularly in major diamond markets, along with ongoing positive growth within the non-mining sector,” he continued.
The economy of this southern African nation is heavily dependent on mining, especially diamonds, which account for about one-third of budget revenues and a substantial share of foreign currency earnings.
The finance minister also disclosed various cost-reduction measures in response to earlier forecasts indicating that this year’s budget deficit could surpass initial estimates, reaching 6.7% of gross domestic product.
These strategies are designed to achieve a balanced budget “in the shortest possible timeframe” by aligning expenditures with anticipated revenues and reviving the country’s long-overdue public-private partnership policy, he stated.
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