Botswana’s economy to grow 7.7% in 2021 as diamond industry picks up

Botswana’s finance minister has revealed that the country’s economy will grow by 7.7% in 2021, from a contraction projection of 8.9% in 2020, on the back of improved sentiment in the global diamond industry.

Botswana’s economy dropped by 24% in the second quarter of 2020, as coronavirus enforced lockdowns at home and across the world slowed down domestic economic activity and limited diamond sales.

The southern African country relies on diamond mining – the biggest revenue earner, and the sector accounts for 20% of total gross domestic product (GDP).

During a World Bank online meeting held on Monday evening, Finance Minister Thapelo Matsheka said, “Recent months have seen a robust recovery in the international diamond industry, which will hopefully underpin strong growth in Botswana next year and help to boost exports and fiscal revenues.”

“Based on these developments, we are forecasting a GDP growth rate of 7.7% in 2021,” Matsheka told World Bank Vice President for Eastern and Southern Africa, Hafez Ghanem, during the meeting.

Diamond mining mega firm De Beers said last week it had recorded a 57% jump in sales to $467 million, at its September “Sight” – when selected buyers come to view and buy goods already priced by De Beers.

The firm gets about 70% of its supply from Botswana, and has already cited higher retail orders ahead of the holiday season.

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