12 Million Carats of Accumulated Natural Diamond Stock
18 Million Carats of Annual Production Places Botswana Second Globally After Russia
80% Share of Diamonds in Botswana’s Exports
$730 Million in Projected Revenue by 2026 Compared to an Average of $2 Billion
75% Represents the Sector’s Contribution to Foreign Currency Earnings
Debswana Temporarily Suspended Production in Some Mines Due to Declining Sales
Botswana is currently grappling with one of the toughest downturns in the diamond market in recent years, amidst falling global demand for natural gemstones, increasing competition from lab-grown diamonds, and weak consumption in major markets like China and the United States.
This decline comes at a time when the African country’s economy is heavily reliant on the diamond sector, which is the backbone of its export revenues and government income.
Since early 2026, Botswana has faced a severe economic crisis due to an accumulation of natural diamond stock that reached a record 12 million carats in December 2025, doubling the targeted level of 6.5 million carats. This surplus, combined with decreasing global demand, threatens the stability of the national budget, which relies on diamond revenue for about 30% of its income.
The Ministry of Finance in Botswana reported that the country’s diamond stock had nearly doubled the targeted level and that prices continue to decline, limiting the government’s ability to increase production in the short term to support the economy.
Diamonds account for more than 80% of Botswana’s exports and approximately one-third of budget revenues, making any fluctuations in prices or global demand have a direct impact on economic growth and government spending.
Botswana produced 18 million carats of diamonds, ranking second globally behind Russia, according to Kimberley Process data.
Typically, diamonds contribute about one-third of Botswana’s total public revenue and around 75% of foreign exchange earnings.
According to the ministry, Botswana’s economy is expected to contract by approximately 1% in 2025 after a 3% drop in 2024 due to a collapse in diamond prices driven by weak global demand and increased competition from lab-grown diamonds.
The ministry also noted that Debswana, the joint venture between the government and De Beers responsible for about 90% of the country’s diamond sales, had to temporarily halt production in some mines last year due to the price drop.
Furthermore, exports of Botswana’s goods, including diamonds, to the U.S. are now subject to a 15% tariff. Additional increases in tariffs in major consuming markets like India could prolong the price drop and pressure profits.
The ministry estimates mineral revenues could reach 10.3 billion pula (about $730 million) in 2025/2026, compared to a historical average of 25.3 billion pula (about $2 billion).
Meanwhile, synthetic stones continue to capture a growing share of the global market due to their lower prices and similar visual quality to natural diamonds, posing a long-term challenge to traditional mining companies and producing nations.
The global trade tensions, especially U.S. tariffs on India, have complicated supply chains since most raw diamonds are polished in India before being re-exported to Western markets.
Direct Impact
As Debswana’s revenues decline, cash flows to the national treasury are diminishing, putting pressure on funding for infrastructure projects, social spending, and long-term government investments, raising concerns of a widening fiscal deficit if the current downturn persists.
Amid these pressures, Okavango Diamond Company, Botswana’s government marketing arm, has proactively adjusted its sales policies, opting for long-term contracts instead of volatile auctions to ensure more stable sales and predictable revenues even in difficult market conditions.
Botswana has long sought to reduce its dependence on diamonds by developing sectors such as tourism, financial services, and renewable energy, but these sectors still contribute relatively little compared to mining revenues.
Analysts suggest that the current crisis may prompt the government to accelerate diversification efforts, boost local manufacturing, and refine diamonds domestically to increase added value and attract new investments in non-traditional sectors.
Future Outlook
Despite the current pressures, Botswana remains one of the most financially and institutionally stable countries in Africa, giving it better resilience to shocks compared to other economies reliant on a single commodity.
However, ongoing weak global demand, coupled with fierce competition from Asian producers of lab-grown diamonds, could impose a new reality on the diamond market, forcing traditional producers to rethink their marketing and operational strategies.
Ultimately, this period represents a true test of Botswana’s economic resilience and its ability to transition from a natural resource-based economy to a more diverse and sustainable model.
Recently, Okavango Diamond Company offered about one million carats of rough diamonds in a closed auction on September 25, aiming to support Botswana’s revenues amid a sharp slowdown in global demand for gemstones, reflecting the sensitivity of the current stage of the global diamond market.
Although 95% of registered companies submitted competitive bids, the company decided not to sell part of the offerings, characterizing this decision as “thoughtful and wise” to avoid price pressures.
The company’s general manager, Mimetila Maserii, mentioned that withholding sales in the short term aims to “ensure better market outcomes” and to avoid entering a price-cutting race while focusing on preserving the value and long-term reputation of Botswana’s diamonds.
Additionally, acting general manager of Okavango Diamond Company, Lipalis Makibe, stated that the company plans to increase the share of diamonds it sells to contracted buyers as a means of overcoming the stagnation in the global diamond market.