Botswana urged to diversify revenue for growth

Saturday April 04 2015

The country’s reliance on only one mineral could be detrimental in future. PHOTO | FILE

The Botwana diamond industry has been portrayed as key to its economic success and stability, steering clear of the conflict and corruption that has ravaged many resource-rich countries across the continent. 

With its vast diamond deposits, Botswana has become one of the fastest growing economies in the continent and the world at large.

According to analysts, diamonds have resulted in Botswana having higher economic growth rates than any other country in the world over the past 40 years.

Mining of diamonds accounted for about 41 per cent of government revenue and 32.3 per cent of GDP last year.

The country’s over-reliance on diamonds has left Motswana analysts anxious that a fall in diamond prices or a negative development in the diamond industry can result in the country’s economy nose-diving.   

Former minister of minerals, Dr Ponatshego Kedikilwe said a few years ago that the country’s reliance on only one mineral could be detrimental in future.


“We do recognise that economic diversification is a long term process and in our case, the immediate concern is how to lessen the country’s heavy dependence on diamonds,” Dr Kedikilwe said at Resource Sector Conference.

Dr Kedikilwe’s sentiments were echoed by Imara, an investment banking and asset management that called for Botswana to broaden its horizons and explore other sectors with the potential of bringing in revenue.

“We believe it is paramount for Botswana to use the proceeds from its diamonds to develop other sectors of the economy,” Imara said on its website. It believes such a move will help reduce the negative impact on its economy whenever the global economy takes a hit.

“As much as we laud the move to harness its coal reserves, we believe the government should also pursue diversification beyond the resource space,” it added.

Botswana’s beef sector received a boost after the European Union recently lifted the ban slapped on the country’s beef products last year, allowing the country to resume exporting beef to the EU market.

The EU banned Botswana beef after observing deficiencies in official controls, abattoir operations and certification procedures. The EU used to consume 75 per cent of the beef produced in Botswana.