Botswana, Southern Africa Diversify Economies Amid Lab-Grown Diamond Price Slump

Botswana, heavily reliant on diamond exports which account for 30% of its GDP and 80% of exports, is facing significant economic challenges due to the rise of cheaper lab-grown diamonds primarily produced in China and India. The average price of natural one-carat diamonds has fallen sharply from $6,819 in May 2022 to $4,997 by December 2024, causing a contraction in Botswana's economy for two consecutive years and depleting foreign reserves. In response, President Duma Boko's government has launched a sovereign wealth fund aimed at diversifying the economy and is exploring alternative sectors such as luxury wildlife tourism, medicinal cannabis, and solar power. The financial strain led to a state of emergency declaration in August 2025 after the health system nearly collapsed due to depleted government funds. Additionally, global ratings agency S&P downgraded Botswana's credit rating, citing the economic impact of synthetic diamonds. Neighboring countries like Angola, Namibia, and South Africa are also vulnerable but to a lesser extent, as the regional diamond economies scramble to adapt to these market shifts.