𝐁𝐎𝐓𝐒𝐖𝐀𝐍𝐀 𝐂𝐑𝐄𝐃𝐈𝐓 𝐑𝐀𝐓𝐈𝐍𝐆 𝐒𝐋𝐀𝐒𝐇𝐄𝐃
Botswana’s economic resilience is being tested as the global diamond market faces a prolonged and painful downturn that has unsettled the country’s finances and exposed its reliance on a single commodity.
In a move viewed as a significant warning signal, S&P Global Ratings downgraded Botswana’s longterm sovereign credit rating from ‘BBB+’ to ‘BBB’, citing falling diamond revenues and a rapidly deteriorating fiscal position. The outlook was set to negative, reflecting deep concerns that weak external demand and fiscal pressures could persist.
For Botswana, often praised for careful financial stewardship, the downgrade signals a turning point with serious consequences.The diamond industry has long stood as the backbone of Botswana’s economy, historically contributing around seventy percent of export earnings, a third of fiscal revenue, and roughly a quarter of gross domestic product.
Since late 2023, the sector has been in steep decline, battered by sluggish demand from China and the United States, growing competition from synthetic diamonds, and a broader pullback in luxury spending. The combination of falling prices and volumes has left producers struggling. What once looked like a stable pillar of prosperity now appears increasingly fragile and dangerously exposed to global volatility.
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