Finance Minister Thapelo Matsheka predicts that Botswana’s economy will recover and expand by 7.7 per cent in 2021 from the 8.9 per cent contraction expected this year, on the back of improved sentiment in the global diamond industry
He said this during a recent World Bank online conference.
Botswana’s economy shrank by 24 per cent in the second quarter of 2020 as coronavirus lockdowns hindered domestic and international economic activity and seriously constrained diamond sales. Buyers of precious jewels were locked out of the capital of Gaborone, where they came to buy diamonds from De Beers.
Mining is the sparsely populated southern African country’s biggest revenue earner and accounts for just under 20% of total gross domestic product.
“Recent months have seen a robust recovery in the international diamond industry, which will hopefully underpin strong growth in Botswana next year and help to boost exports and fiscal revenues,” the Finance Minister said.
“Based on these developments, we are forecasting a GDP growth rate of 7.7% in 2021,” Matsheka told World Bank Vice President for Eastern and Southern Africa, Hafez Ghanem, during the meeting.
Global firm De Beers, which gets about 70% of its supply from Botswana, said last week it had seen a 57% jump in sales to $467 million at its September “Sight” – when selected buyers come to view and purchase goods already priced by De Beers.
The firm cited higher retail orders ahead of the holiday season.