Botswana’s government to boost economy as diamond prices drop

With diamond price drop, Botswana’s President Ian Khama has announced part of the current $8.5 billion foreign exchange reserves to boost the economy, as reported in a leading media. The diamond industry in Botswana contributes to 75 percent of Botswana’s foreign exchange and 30 percent to its GDP and the country itself is a major diamond producer of the world, reports say.

Rough diamond exports from Botswana in the first six months of the year reduced 15 percent in value terms. It witnessed a drop in demand beginning late 2014 owing to middlemen being caught between the strong dollar and strained liquidity.

The country’s government reduced its growth forecast in September from 4.9 to 2.6 percent and would post a budget deficit this year and in 2016. It is looking at focusing its economic stimulus on new projects in tourism development, agriculture, construction and manufacturing to boost its economy, as per reports.