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By Newz.Africa Africa Desk | Gabarone, Botswana | Published: 20 January 2026 | Botswana diamond oversupply.
Oversupply Leaves Botswana Struggling to Move Its Diamonds
Botswana, Africa’s leading diamond producer, is facing one of its worst market slumps in years. The country has accumulated 12 million carats in inventory, almost 85 percent above the government’s allowable ceiling of 6.5 million carats. Officials attribute the glut to weak global demand. Prices are falling. The rapid rise of lab‑grown diamonds continues to undercut natural stones.
Government data shows that the oversupply has left the country incapable of boosting output, even as revenues contract. Diamonds account for nearly a third of Botswana’s national revenue. They also make up three‑quarters of its foreign exchange earnings. This situation makes the current slowdown especially severe.
Weak Global Demand Worsens the Crisis
Analysts say the slump is tied to broad global market weakness, with luxury consumption slowing across several major economies. The finance ministry has warned that production will remain flat until inventories drop back to manageable levels. The lack of demand is pushing prices down and forcing operators to scale back activities.
Debswana is a 50/50 joint venture between the government and De Beers. It typically accounts for 90 percent of national diamond sales. The company has already suspended production at some mines. The company is unable to sell stocks at levels needed to stabilise revenue.
Economic Pressures Mount as Revenues Decline
The slump has hit the broader economy hard. Botswana’s GDP is projected to shrink by almost 1 percent in 2025, after a 3 percent contraction the previous year. Labour disruptions, falling export receipts, and tightening government budgets are putting pressure on services dependent on the diamond industry.
Officials say collapsing diamond prices, driven partly by competition from lab‑grown stones, are pushing the country into deeper financial difficulty. As revenues fall, authorities have signalled cuts to public expenditure and delays to some development targets.
Original Reporting
Newz.Africa reviewed financial data cited in the government’s 2026/27 Budget Strategy Paper and independent reporting from Business Insider Africa.
Primary artefact:
Botswana’s reported inventory figure of 12 million carats vs allowable 6.5 million carats.
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