4 hours agoBotswana’s export earnings drop by P5.4 Billion in early 2026

Botswana is facing challenges in sustaining its export recovery, with new data revealing a P5.4 billion decline in export earnings during the first five months of 2026. According to figures released last week by Statistics Botswana, the government’s official statistics agency, export revenues totaled P25.6 billion between January and May 2026. This marks a 17.3 percent decrease, P5.4 billion less, compared to the P31 billion recorded during the same period in 2025.

Diamonds accounted for the largest share of the drop in export earnings. Revenue from diamond exports fell by P6.65 billion, from P22.57 billion in January-May 2025 to P15.92 billion in the same period this year. Earnings from live cattle, salt and soda ash, and coal also declined, by P73.2 million, P68.5 million, and P63.4 million respectively.

Other significant contributors to the fall included iron and steel products, which dropped by P22.9 million, and vehicles and transport equipment, down by P11.3 million. Despite the downturn, diamonds remained Botswana’s dominant export commodity, accounting for 62.3 percent of total export revenues (P15.92 billion) in the first five months of 2026, followed by copper at P5.9 billion, machinery and electrical equipment at P1.47 billion, and other goods totaling P750.8 million. The decline in export revenues, coupled with a rising import bill, pushed Botswana’s trade deficit up by P3 billion; from P10 billion in January-May 2025 to P13 billion in the same period this year.

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This widening deficit threatens to reverse recent gains in foreign exchange reserves if the trend continues. The country’s reserves had grown by P13.3 billion, rising from P48.5 billion in April 2025 to P61.8 billion in April 2026. Global demand for Botswana’s diamonds is expected to remain subdued for the foreseeable future, weighing heavily on the country’s exports, according to Standard & Poor’s 2026 Global Ratings report.

The report projects modest export growth this year and slow progress over the next three years. After a 1.0 percent increase in 2025, S&P anticipates export growth of 0.5 percent in 2026, followed by 1.0 percent in 2027, and 1.5 percent in both 2028 and 2029. The agency also forecasts a decline in exports as a share of gross domestic product (GDP), dropping from 28.0 percent in 2025 to 25.9 percent in 2026, with a gradual decrease through 2029; to 24.7 percent in 2027, 23.6 percent in 2028, and 22.4 percent in 2029.

Fitch Solutions analysts attributed Botswana’s modest export outlook to ongoing uncertainty in the global diamond market. They cited weakening demand, price pressures from lab-grown alternatives, and questions about De Beers’ long-term role as key factors. At the same time, they expect Botswana’s imports to rise, partly driven by higher oil prices, which will further widen the trade deficit.

“Botswana’s external position, which we had initially expected to improve modestly in 2026, is now likely to come under renewed pressure,” the analysts said. “While we previously expected diamond inventory drawdowns and modest export gains to support a narrow current account surplus, higher oil prices will increase the import bill and offset much of this improvement.” The deterioration in Botswana’s trade performance comes at a vulnerable moment, with external buffers still fragile. Although foreign reserves have recently improved, they remain below historical levels and insufficient to absorb external shocks or shield the economy from worsening trade conditions.

“As a result, risks to the balance of payments are increasing. Higher import costs, combined with structurally weak export growth, will weigh on the current account and place additional pressure on reserves,” the analysts warned.

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