Botswana's diamond stockpile has surged to nearly double its target inventory level, severely limiting the country's ability to ramp up production and revive its struggling economy, according to the finance ministry.
A finance ministry paper seen by Reuters reveals a 12 million carat stockpile by December 2025, almost double the government's allowable inventory of 6.5 million carats. The ministry stated that production is expected to remain unchanged until inventories are drawn down closer to minimum levels.
The nation's economy is projected to shrink by nearly 1 per cent in 2025, following a 3 per cent contraction the previous year. This decline stems from collapsing diamond prices driven by lab-grown gems and weak global demand. The price slump forced Debswana, the joint venture with De Beers responsible for 90 per cent of Botswana's diamond sales, to temporarily suspend production at some mines last year.
Diamonds normally contribute around one-third of Botswana's national revenues and three-quarters of its foreign exchange receipts. However, mineral revenues are estimated to reach only 10.3 billion pula ($729.24 million) in 2025/26, compared to a historical annual average of 25.3 billion pula, reflecting lower sales.
Botswana's exports to the US, including diamonds, now face a 15 per cent tariff. Higher tariffs on major diamond-consuming markets such as India could prolong lower gem prices and squeeze profit margins, the ministry added. A slowdown in mining activity would reduce government fiscal revenues from the sector.
