Gaborone: Botswana, a country long known for its natural diamond wealth, is facing financial pressure as global demand for mined diamonds continues to fall. The slowdown is affecting workers, government revenue and the wider economy, raising concerns about the future of the industry that helped build the nation.
For decades, diamonds made up close to 80 percent of Botswana’s foreign earnings and played a key role in national development projects, including hospitals, highways and schools. But the rise of laboratory grown diamonds, especially from India and China, has changed the global market. These lab made stones are cheaper and increasingly popular among young buyers, leading to a drop in demand for natural stones.
The country’s major producer, Debswana, has reduced its diamond output after a sharp fall in sales. Reports indicate that production dropped by more than a quarter in the past year, and some mining operations have slowed or paused. This has led to job losses across the polishing and cutting sector, where many skilled workers have already been laid off or placed on unpaid leave.
The fall in diamond earnings has also affected government finances. Forecasts suggest that Botswana may face one of the largest budget deficits in sub Saharan Africa this year. Analysts warn that more pressure could follow if the market does not recover.
In response, the government and industry leaders are working on new strategies to strengthen the sector. The Okavango Diamond Company is launching scheduled contract sales in an attempt to improve stability and expand market access. Botswana has also held talks about having a larger stake in De Beers, the global diamond giant that operates in partnership with the government.
Economists say the situation shows the urgent need for Botswana to diversify its economy. Tourism, agriculture and other minerals have been identified as possible growth sectors, but these industries currently cannot replace diamond revenue.
Despite the challenges, officials say they are hopeful that the natural diamond market will eventually stabilize. However, many believe that the world has entered a new era where technology and changing consumer preferences will continue to reshape the diamond industry.
For now, many families and workers who relied on diamonds for income are waiting to see whether the economy can recover or whether Botswana must prepare for a future less dependent on the stones that once shaped its identity.