GABORONE, Botswana / AfricaWire.IO / – Botswana’s diamond production has risen 14% this year, helping the economy recover from a two-year slump, as the government raised its 2026 growth forecast to 3.8%. The Ministry of Finance had initially forecast growth of 3.1%. Output reached 15.1 million carats in the year to date, up from 13.3 million carats in the same period of 2025, according to ministry data. The downturn began with a slump in the diamond market in the third quarter of 2023.
Minerals and Energy Minister Bogolo Kenewendo said diamonds appear to have hit rock bottom and started bouncing back. She said the US market had moved from a decline of about 3.3% to growth of around 5% to 6%, and even double digits in July. “These are comforting. We are cautiously optimistic about the industry,” she said. India is seeing similar growth, she added.
Kenewendo said the intent to buy natural diamonds in India and the Far East stands at about 25% to 26%, against 17% for lab-grown stones. Producers including Botswana and De Beers are using targeted marketing to counter synthetic competition, economic uncertainty and US tariffs. Consumers are gradually returning to natural diamonds, the minister said. The rebound follows a difficult period that led to a credit downgrade for the country earlier this year.
Khoemacau expansion lifts copper
Copper is also emerging as a growth driver. MMG is spending about $900 million to expand its Khoemacau mine, which will become one of the region’s largest copper producers. The expansion, approved in December 2025, aims to lift annual output to 130,000 tonnes of copper, with first production expected in 2028. Kenewendo said the mine will employ 7,000 people and become the largest mine ever in Botswana by employment.
Copper exports climbed from zero in 2016, after the major mines shut, to 11.1 billion pula in 2025. They reached 8.5 billion pula by July this year, 27% more than a year earlier. The state-owned Exploration Investment Company Botswana is leading a push to explore four mineral belts for chrome, lithium, platinum, manganese, uranium and nickel. About 70% of the country’s land remains unexplored for minerals. Neighboring Zambia is also deepening investment ties with the UAE.
Inflation outlook worsens
The Bank of Botswana said the recovery reflects stronger-than-expected performance in the first half of 2026, driven by higher diamond production. Growth in other sectors has been modest, it said. The World Bank, in an October outlook, projected more cautious growth of 3.4% and noted that De Beers’ sales fell 23% in the first half. Critics say slow job creation and high inflation are limiting the benefits for ordinary citizens.
The central bank now forecasts average inflation of 8.1% this year, compared with its August projection of 5.9%. Governor Lesego Moseki cited higher domestic fuel prices and electricity tariffs as key upside risks. El Niño effects such as drought and livestock deaths could add further pressure. Higher prices for oil, gas and fertilizers due to the Middle East conflict, along with global trade tensions, are also expected to lift inflation.