Botswana’s rebound is real. The harder test comes after diamonds

A rebound with a narrow base

Botswana’s economy grew 8.7% year on year in the second quarter of 2026, according to Statistics Botswana figures reported in September.¹ The swing is large partly because the base was weak: output fell 5.2% in the same quarter of 2025, when mining was subdued.¹ Mining and quarrying value added rose 81.7%, and diamond mining alone rose 94.7% on higher processing volumes and better recovered grades at the Orapa and Jwaneng mines.¹

The rest of the economy did not join in. Non-mining GDP fell 0.2%. Manufacturing fell 9.2%, construction 1.6% and agriculture 23%, and household consumption fell 7.3%.¹ Some services grew modestly, including wholesale and retail trade (3.1%) and professional, scientific and technical activities (3.8%).¹

Why diamonds still set the tempo

Diamonds account for about one third of government revenue and roughly three quarters of foreign-exchange earnings.² The IMF has put the sector at about 30% of GDP and 85% of exports.³ Debswana, the joint venture between the government and De Beers, cut output by 16% in 2025 and now plans to raise it to 18 million carats in 2026, from 15 million. The central bank has said that increase is what will drive the economy this year.²

The finance minister had expected 2026 growth of 3.1%, largely dependent on a diamond recovery.² The IMF’s October outlook sees 4.4% growth for 2026, slightly below its April forecast of 4.7%, after a 0.7% contraction last year.⁴

Using the upswing to diversify

Two developments show how policymakers are trying to use the cycle. The Diamonds for Development Fund, a partnership between De Beers and the government, has moved into implementation. An initial P1 billion has been advanced, and a ten-member independent board chaired by Dr Akinwumi Adesina is to channel diamond revenue into non-mining sectors.⁵

Meanwhile, the future of De Beers itself is being settled. Botswana holds about 15% of the company and is reported to be negotiating a stake of around 25% as Anglo American prepares to exit. No deal has been announced.⁶

Economists commenting on the GDP release named the sectors with potential: diamond beneficiation, beef and agro-processing, tourism, copper and critical minerals, financial and digital services, and manufacturing for SACU and AfCFTA markets.¹ The test one of them set is blunt: can Botswana keep growing when diamond production is flat or falling?¹

Sources

1. Diamonds Power Botswana’s 8.7% Rebound as Pressure Builds for Broader Growth Bantu Gazette, 15 October 2026. Reports Statistics Botswana’s second-quarter 2026 national accounts.
2. Botswana’s Debswana plans 20% diamond output hike in 2026 Reuters via Kitco, 25 June 2026
3. IMF recommends reforms as Botswana faces mining-induced fiscal pressure Mining Weekly, 29 September 2025
4. IMF optimistic on Botswana rebound, but warns of price pains Mmegi, October 2026. Reports the IMF’s October 2026 World Economic Outlook.
5. Botswana: Govt and De Beers Advance P1bn Into Diamond Fund Botswana Daily News via allAfrica, 21–22 October 2026
6. Anglo American’s De Beers exit close as Botswana raises the stakes Bizcommunity, 14 October 2026. Cites a Bloomberg report.

This article reflects NextCap’s reading of public information as at 28 October 2026. It is for general information only and is not financial, legal or tax advice. Figures are taken from the sources listed and may have been revised since. See our disclosures.