58% mining collapse between Q3 and Q4 now threatens a GDP contraction, as critics warn the UDC government’s wake-up call came long ago.
GAZETTE REPORTER
Botswana’s economic outlook has darkened sharply after new data from Statistics Botswana showed mining output plunged by nearly 58% between the third and fourth quarters. The figures are drawn from the Index of the Physical Volume of Mining Production (IMP), Q4 2025, published on March 31, 2026, which tracks the performance of the country’s mining sector.
The scale of the downturn in the country’s dominant sector leaves little room for recovery elsewhere, with smaller industries unable to absorb the shock. What initially appeared to be a rebound, with 8.2% growth recorded in Q3, is now being reassessed as a temporary surge rather than a sign of sustained recovery.
PRODUCTION REALITY
Government messaging in recent months had struck a more optimistic tone. Minister of Energy and Minerals Bogolo Kenewendo told Parliament that diamond demand was improving, pointing to positive holiday sales and renewed interest from global jewellery markets.
“10 years after category marketing stalled we are now rebounding, actively investing and this is the work that we hope will be reflected in the sales that are to come. Markets are returning to the diamond industry, we are seeing this. The December holiday sales were positive. The jewellery industry is positive, manufacturing hubs are asking for more (natural) diamonds,” Kenewendo said.
Yet the latest production data tells a more sobering story, suggesting that improved sentiment has not translated into meaningful output gains. With stock-driven sales now exhausted, the fourth quarter appears to reflect the underlying weakness of the sector.
STRUCTURAL DECLINE
Independent economist Sennye Obuseng says the downturn should not come as a surprise, because: “we are not selling, and we are not producing as much because the market has not improved.”
Obuseng says natural diamonds are not going to turn the tide against lab-grown diamonds.
“We may be looking at the death of an industry that has carried us this far. We are in trouble. The future is bleak. We are betting on a recovery against terrible odds. The industry is unlikely to return to its glory days. Even prices are falling; it is not only production,” he said.
According to Obuseng, “Botswana has failed to confront long-standing structural challenges in the diamond industry”.
POLICY PRESSURE
Obuseng is equally critical of fiscal management, warning that government spending patterns remain misaligned with economic realities.
“There is bad expenditure at a time like this. There is no prioritising. We are not acting broke. That is what is scary,” he said.
With reports of strained public finances, including challenges in meeting recurrent obligations, the economic slowdown is beginning to spill beyond mining into the broader economy.
SPILLOVER RISKS
A sustained decline in diamond output threatens export earnings, government revenues and foreign exchange inflows, all of which underpin economic stability.
For businesses, the effects are likely to be immediate. Retail and service sectors may face weaker demand as incomes tighten, while industries linked to mining such as logistics and construction could see contracts dry up. Financial institutions, meanwhile, may contend with reduced liquidity and slower credit growth.
As the data points to a deepening slowdown, the emerging consensus among analysts is that Botswana’s challenges are no longer cyclical but structural, raising urgent questions about how quickly the new government can respond to an economy that is showing signs of prolonged strain.