Diamonds Falter, Crisis Deepens

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. 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. 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.

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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. 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”.

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.

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