13 September 2025
Botswana’s credit rating was cut by S&P Global Ratings, another blow to its diamond-dependent economy that’s struggling with a slump in demand for its gems.
The country had its long-term sovereign credit rating cut one notch to BBB, the second-lowest investment grade, and S&P also gave it a negative outlook. Botswana still retained its rank as the highest-rated country in Africa, ahead of Mauritius.
“Global demand and prices for natural diamonds will likely remain weak and weigh on Botswana’s minerals-dependent economy,” S&P said in a statement released late Friday.
This is “eroding its previously strong foreign exchange and fiscal buffers,” it added.
The southern African country, the world’s biggest diamond producer by value, depends on the gems for about 80% of its income and a third of government revenue. Revenue from the stones is being slashed due to competition from cheaper, lab-grown equivalents that are gaining popularity in the US, the biggest diamond market.
Botswana’s economy is likely to contract for a second consecutive year in 2025, with a fiscal deficit of 7.6%, S&P said. The ratings agency also forecast that government debt will rise to 34% of gross domestic product by 2028 from 6.3% in 2023.
Source: https://shorturl.at/bTCcO
