Botswana economy grows 8.7% amid diamond rebound and BDC restructuring

Botswana’s economy recorded an 8.7% growth rate in the second quarter of 2026, driven largely by an 81.7% expansion in the mining and quarrying sector. Diamond production reached 5.49 million carats, more than doubling from the previous year. However, this headline growth contrasts with a 7.3% decline in household consumption and contraction in manufacturing, suggesting that wealth generated from mining has not yet translated into broader economic stability for households.

In response to shifting economic conditions, the Botswana Development Corporation (BDC) is executing a turnaround strategy focused on asset recycling. The corporation released P614 million from underperforming and non-core assets during FY2026, with an additional P388 million classified as held for sale. These funds are being redirected into new investments aligned with the Botswana Economic Transformation Programme (BETP), including the Milk Valley Farm dairy project.

Despite the production surge, market indicators show challenges in the diamond sector. De Beers reported a 44% drop in consolidated rough diamond sales value and a 37% decrease in average realized prices. This divergence between high production volumes and falling sales values suggests potential inventory accumulation, where diamonds are being produced but remain in storage rather than being sold to customers.