Botswana and De Beers agree new diamond sales deal
03 Jul 2023
11 Jul 2022
Botswana can turn its economy around, generate jobs and enjoy a strong recovery from the pandemic by boosting investment from the private sector into tourism, energy and other sectors of the economy.
This is according to the latest report unveiled by the International Finance Corporation (IFC) and the World Bank.
The report entitled ‘Botswana Country Private Sector Diagnostic (CPSD)’ underscores the growth and investment opportunities in Botswana, and ways to reach a more sustainable future, including through diversification and regulatory improvements.
The report proposes bolstering finance access for smaller businesses and an increase in investment in skills development for employees. Boosting investments to digital infrastructure and transport is also mooted, which trails behind other countries in the region.
In addition, the report refers to Botswana’s reliance on diamonds as a likely challenge to growth. The country is the second-largest diamond producer in the world, yet the pandemic has impacted revenues from both the diamond and tourism sectors, which make up around 30% of GDP. Diamonds account for around 90% of the country’s exports, the findings show.
"The COVID-19 pandemic disrupted economic activity in Botswana and sharply reduced revenues from the diamond and tourism sectors," said Marie Francoise Marie-Nelly, World Bank Country Director for Botswana, Eswatini, Lesotho, Namibia and South Africa. "The World Bank is committed to supporting the government to enact reforms aimed at attracting private investment to diversify the economy and create jobs."
Carlos Katsuya, IFC's Senior Country Manager for Botswana stated: "Botswana's economy recorded rapid growth in the decades after independence, largely driven by diamond and mineral wealth, but the country experienced limited gains in employment and income equality. Increasing private sector participation can help to unlock the investment needed to support the country's economic diversification agenda, create jobs, reduce income inequality, and bolster economic growth."
The report coincides with commitments reached within Botswana's Economic Recovery and Transformation Plan and Vision 2036. The plan aims to boost the domestic economy by moving away from diamonds towards a labour intensive, export-focused, private sector driven model.