• Botswana GDP shrank 5.4% in Q4 2025, statistics show

• Decline driven by sharp drop in mining sector output

• Government targets recovery, prioritizes economic diversification plans

Botswana's real gross domestic product shrank 5.4% year-on-year in the fourth quarter of 2025, according to data released Tuesday by the national statistics agency. The contraction follows declines of 2.8% in 2024 and 0.4% in 2025.

The drop was driven primarily by a 47% fall in value added in the mining and quarrying sector. The construction sector and the water and electricity sector also posted declines of 2.3% and 1.3%, respectively. All other sectors recorded positive growth, including agriculture, accommodation and food services, and information and communication technology.

The data follows comments by Vice President and Finance Minister Ndaba Gaolathe, who said in February during his budget speech that the economy was expected to recover in 2026, with growth projected at 3.1%.

Botswana’s economy remains heavily dependent on diamonds, which account for more than 90% of export revenues, according to the World Bank, and relies on a large public sector. The country recorded sustained growth over several decades, but economic activity has contracted in recent years as the diamond sector has come under pressure from competition with synthetic diamonds and weaker demand from China.

The World Bank also said fiscal pressures have intensified amid sluggish growth and declining mining revenues. Public debt is expected to rise rapidly and exceed its ceiling of 40% of GDP in 2025, driven by persistent budget deficits, reflecting inflexible spending and limited financing options.

Diversifying the economy has become a priority for Botswana to reduce its reliance on diamonds. The government has stepped up efforts in recent years. In October 2025, the country unveiled a five-year plan known as the 12th National Development Plan (NDP 12). The document sets the country’s economic priorities through 2030 and will guide future budgets. It aims to accelerate diversification, focusing on transport infrastructure, water and housing.

The International Monetary Fund said that “over the medium term, if the authorities implement ambitious reforms to ensure fiscal and external sustainability and diversify the economy, growth could gradually exceed 4%.”

Lydie Mobio