Economic diversification takes centre stage

In the face of growing global production of lab-grown diamonds, Botswana has launched an aggressive global marketing campaign to promote natural gems, while taking steps to diversify its economy. The country is the world’s leading natural diamond producer by value, with the sector accounting for around 30% of Botswana’s gross domestic product and 80% of its exports by value. Lab-grown diamonds and mined gems are chemically identical, with the factory version much cheaper to produce. Botswana and its industry partners are positioning natural diamonds as premium products, with a back story. They are rare, naturally formed and more valuable than synthetic alternatives. There is a push for clear international labelling standards to distinguish natural stones from lab-grown versions. Botswana has been diversifying into sectors such as financial services, tourism, trade and agro-processing for some time. In 2021, former president Mokgweetsi Masisi launched the “Reset Agenda,” a strategic policy initiative to accelerate its transition to a high- income country, according to the Ministry of Trade and Entrepreneurship. The president said a new mindset, seeking new and smarter ways of implementing projects on time and budget, and whose focus was on citizen economic inclusion, was needed. One of the outcomes was an African Development Bank (AfDB)-sponsored project to support the Government of Botswana in its efforts to diversify the economy through increased competitiveness of SMEs and effectiveness of Business Support Institutions in business support and service delivery, according to the project task manager, John Ng’ambi. The ban on imports of fruit and vegetables from South Africa was instituted through a project. It supported local production of fresh fruits and vegetables to reach 86 000 tons according to Botswana Statistics. Small stock farmers also benefited from non-tariff barriers, with production levels rising, farm waste (25% to 5%) reducing and growth in the number of small stock commercial farmers, according to Ng’ambi. In March 2025, the government launched the Private Sector Development Strategy (PSDS), which will be implemented through to 2030. PSDS has five pillars – diversify the economy and increase production capacity; diversify Botswana’s export basket; mainstream the informal sector and developing SMMEs; improve the competitiveness and productivity nexus; and increase private sector participation and leadership of strategy implementation. The plan is estimated to cost R90 million to implement over a period of five years. ER