…soars 10.9% in Q3 2025, outpacing South Africa, Nigeria, Angola
Botswana’s economy rebounded in the third quarter of 2025, expanding to its fastest pace in five years after contracting in the previous quarter, as diamond production and broader mining activity surged, according to data released by the country’s Central Statistics Office.
Gross domestic product (GDP) grew to 10.9 percent in Q3 2025, reversing a 3.5 percent contraction in Q2. On a year-on-year basis, the economy also improved from a 2.8 percent contraction recorded in the same period last year.
“This growth was driven by increases in real value added by Diamond Traders (88.1 percent), Mining and Quarrying (39.5 percent), Finance, Insurance and Pension Funding (5.2 percent), Transport and Storage (5.2 percent), and Accommodation and Food Services (4.6 percent),” the statistics agency said in its latest GDP report.
Compared with its bigger peers, Botswana outperformed as South Africa’s economy—Africa’s most industrialised and valued at $401.1 billion—expanded by 0.5 percent in Q3, down from 0.9 percent in the previous quarter, while Nigeria, Africa’s most populous nation with a $252.2 billion economy, saw growth moderate to 3.98 percent in Q3 from 4.23 percent in Q2.
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Angola’s economy, valued at $100.9 billion, grew by 0.05 percent in Q3, reversing a 0.1 percent contraction in the previous quarter.
Botswana, with an economy valued at about $19.4 billion, is widely regarded as one of Africa’s most stable and well-managed economies, underpinned by prudent macroeconomic management, strong institutions, and decades of political stability.
Since gaining independence in 1966, the country has transitioned from one of the world’s poorest nations to an upper-middle-income economy, largely on the back of diamond mining.
Diamonds account for roughly 80 percent of export earnings, about 30 percent of government revenue, and a significant share of GDP. The government’s long-standing partnership with De Beers through Debswana has historically ensured steady foreign-exchange inflows and fiscal buffers, enabling sustained investment in infrastructure, education, and healthcare.
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Despite the strong Q3 rebound, Botswana’s economy has faced headwinds over the past two years as global demand for natural diamonds weakened.
Real diamond exports declined from late 2023 through 2024 and into early 2025, reflecting softer demand in key markets such as China and the US, where economic slowdowns reduced spending on luxury goods. Falling rough diamond prices further weighed on export volumes and values.
According to data from the Bank of Botswana, diamond exports fell by about 34.6 percent between 2023 and 2024, declining from approximately P61.7 billion ($4.5 billion) to P40.4 billion ($3.0 billion), based on an average exchange rate of P13.6/$1. While diamonds remain Botswana’s dominant export, this slump significantly reduced their contribution to overall export earnings.
The weakness in diamond exports contributed to broader economic contraction. Botswana’s economy shrank by 1.8 percent in the first quarter of 2024, largely due to the decline in diamond production and related exports. The downturn also widened the trade deficit in 2024, as export earnings failed to keep pace with imports.
Preliminary data from the Bank of Botswana suggests that diamond exports began in 2025 on a weak footing, falling to P7.8 billion ($574 million) in the first quarter, compared with P11.7 billion ($860 million) in the same period a year earlier.
However, exports picked up later in the first half of the year, rising to P16.3 billion ($1.2 billion) between April and June, compared with P11.8 billion ($868 million) over the corresponding period last year. While the central bank did not specify the drivers of the rebound, the data points to a gradual clearance of diamond inventories accumulated during the global downturn.
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The prolonged weakness in diamond exports squeezed foreign-exchange inflows, tightened liquidity, and pushed up borrowing costs across the economy.
In response, Botswana’s central bank raised its benchmark interest rate to a 43-month high of 3.5 percent in October 2025, marking its first rate hike since March 2022. The 160-basis-point increase from 1.9 percent in August signalled a shift in the Bank of Botswana’s monetary stance after more than two years of steady easing.
The Monetary Policy Committee said the move was aimed at aligning the policy rate more closely with market lending rates, which have risen sharply amid tightening liquidity conditions.
“The rate increase is intended to strengthen monetary policy transmission,” Cornelius Dekop, governor of the Bank of Botswana, said at a recent press briefing in Gaborone, the country’s capital city.