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Bloomberg<\/p>\n\n By<\/b>
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Bloomberg\n <\/p>\n
\n Published<\/b>
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September 2, 2025<\/p>\n
\n Across Botswana the lines of patients outside government clinics are lengthening, construction companies dependent on state jobs\u00a0are firing workers and university students are threatening to boycott lectures after not getting the allowance increases\u00a0they were promised.<\/p>\n
Bloomberg<\/p>\n
The economic slowdown is a sharp reversal from just a few years ago when the world\u2019s richest diamond deposits allowed the sparsely-populated desert nation of 2.5 million people to invest in\u00a0free and efficient healthcare and\u00a0plow\u00a0money into funding\u00a0tertiary education for students both at home and abroad. Its robust finances\u00a0allowed it to provide for its citizens\u00a0in a way that made it the envy of southern Africa.\u00a0<\/p>\n
The discovery of gems in 1967 transformed what was a rural backwater with, at the time of independence from the UK a year earlier, only a few miles of tarred road into the richest nation per capita on the sub-Saharan African mainland. Six decades later a diamond-market crisis has turned\u00a0that find\u00a0into an affliction\u00a0and a cautionary tale of what can happen to an economy that becomes overly reliant on one commodity.\u00a0<\/p>\n
\u201cFor decades, we have leaned and relied heavily on diamonds. While they served us well, we know painfully today that this model has reached its limits,\u201d President Duma Boko, 55, said in an August speech. \u201cThis is no longer an economic challenge alone; it is a national social existential threat.\u201d<\/p>\n
The market for natural diamonds is in crisis, with cut-price lab-grown equivalents hitting demand particularly hard in the US, the biggest market for the gems. They accounted for almost half of engagement ring purchases last year compared with 5% in 2019, according to jewelry insurer BriteCo Inc. The collapse of the luxury retail sector in China and the impact US tariffs have had on trade have also hurt the industry.<\/p>\n
While lab gems\u00a0can be produced in weeks or months, the formation of natural diamonds, made of crystallized carbon formed under extreme pressure and heat deep beneath the earth\u2019s surface, can take billions of years before volcanic eruptions propel them upwards to depths where they can be mined or found on ocean or river beds.\u00a0\u00a0They also cost many times as much as their synthetic rivals.Their increasing popularity is creating the biggest disruption in the market since abundant alluvial diamonds were discovered on Namibia\u2019s beaches early last century, causing prices to plunge, according to mining historian Duncan Money.\u00a0<\/p>\n
It\u2019s choking off the revenue that accounts for 80% of Botswana\u2019s exports and a third of government income. After repeated write-downs of its value Anglo American<\/a> Plc is looking to sell De Beers<\/a>, the world\u2019s biggest diamond company that mines almost all of Botswana\u2019s gems in a venture with the government.<\/p>\n Boko\u2019s administration, which in October displaced a political party that had ruled since independence, is scrambling.<\/p>\n In July, the government engaged Malaysia\u2019s PEMANDU Associates to advise on accelerating economic diversification and on Aug. 21 Boko took to Facebook to announce a plan for a little-known Qatari group, Al Mansour Holdings, to invest $12 billion. There was scant\u00a0information about how the capital will be deployed and the same group has in recent weeks promised more than\u00a0$100\u00a0billion in investment across six\u00a0African countries, raising questions about the credibility of the pledge.\u00a0<\/p>\n The president on Aug. 25 declared a public health emergency and implored pension funds and insurers to help fund the response. Government has frozen recruitment and there are shortages of medication, medical supplies and equipment, according to Kefilwe Selema, president of the Botswana Doctors Union.\u00a0<\/p>\n \u201cThe situation is very bad,\u201d said Galeemiswe Mosheti, a 42-year-old diabetes-sufferer who arrives at a government clinic in the capital Gaborone, at 8 a.m. and can wait as long as eight hours for his medicine compared with just an hour a year ago. \u201cWe\u2019re spending long periods in the queue and our jobs suffer,\u2019\u2019 said the taxi driver who loses income every time he fetches waits to be attended to.<\/p>\n For construction companies dependent on government work the situation is no better.\u00a0<\/p>\n \u201cMost of our members have had to retrench workers,\u201d said Tshotlego Kagiso, chairman of the Tshipidi Badiri Builders Association, the country\u2019s largest building contractors organization, which before the current downturn had more than 800 members, some of whom can no longer afford their membership fees.<\/p>\n \u201cThe majority have suspended operations and many have closed altogether due to slower government spending,\u201d he added, saying thousands of workers have lost their jobs without being able to be more specific.<\/p>\n The country\u2019s economic statistics tell a story of rapid decline and belie De Beers\u2019 marketing catchphrase, \u2018A diamond is forever.\u2019\u00a0<\/p>\n