In the first quarter of 2024, Botswana's economy contracted sharply by 5.3%, a stark contrast to the 5.3% growth observed in the same period last year. The downturn was primarily attributed to a significant decline in diamond demand globally, a crucial sector that forms 80% of the country's export revenue. According to Statistics Botswana, diamond production plummeted by 27.3%.
Specifically, the real value added by diamond traders plummeted by 46.8%, contrasting sharply with a 3.7% increase seen in the previous year. The mining and quarrying sector, another vital component of Botswana's economy, also saw a substantial decline with a 24.8% reduction in real value.
The overall contraction in GDP was largely driven by declines in key sectors such as diamond trading, mining & quarrying, water & electricity, and manufacturing, as noted in the report. Conversely, other industries managed to maintain positive growth rates, exceeding 0.5%.
Earlier forecasts by Botswana's central bank had anticipated a 4.2% economic growth target for the year, a goal now at risk due to the current economic challenges.
Botswana, renowned for having the highest per capita GDP among continental African nations, largely attributes its economic strength to diamond production. This revenue source supports various national initiatives, including the provision of free education to its population of 2.3 million.
