The African country struggling to sell its diamonds as stockpiles continue to grow
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Why this diamond-rich country is struggling to shift its gems
- Botswana is grappling with a diamond stockpile nearly double its target inventory levels, severely limiting its capacity to boost gem production amid persistent low prices.
- The nation's economy is projected to shrink by almost 1 per cent in 2025, following a 3 per cent contraction in the previous year, primarily due to the struggling diamond sector.
- The decline in diamond prices, attributed to the rise of lab-grown gems and weak global demand, led to temporary production suspensions at some mines last year.
- Despite producing 18 million carats in 2024, making it the second-largest producer globally, Botswana's future output is expected to remain broadly unchanged until its excess inventory is reduced.
- Diamonds typically contribute a third of Botswana's national revenues, and reduced sales, compounded by tariffs on exports to key markets like the US, are significantly impacting government income.