The decline in diamond exports has had a big impact on government finances, given that income from minerals is usually the largest single source of government revenues. Lower mineral revenues, combined with high expense budgets in 2023/24 and the current 2024/25 financial year (FY), have had a huge negative impact on the budget. The preliminarybudget deficit (budget income minus expenses) for the recently completed 2023-24 FY, was double what was projected a few months back in the 2024 budget.
Botswana’s diamond portfolio is so large that even though other industries are performing i.e. lower inflation in the finance industry, gains in government investments, the country still faces a potential deficit. Concerns around the diamond industry is also further fuelled by the recent bid of Anglo American to sell of its shares in De Beers which owns 50% of Debswana and is also one of the largest diamond producers in the world.
With the future looking uncertain, economists around the world suggest that diamond suppliers try to diversify their portfolios. For our country this avenue could come in the form of copper nickel. Botswana used to mine the metal via Bamangwato Concessions Limited (BCL), however back in early 2016 the mine was placed under liquidation by the Khama administration citing unprofitability as the main reason. Contrary to popular belief the copper metal did not run out instead the demand for the metal was low leading to low market prices that were commercially impractical for suppliers.
Copper prices are expected to pick up because of increasing demand from the tech industry. Electric cars, chip components and many other electronics are poised to drive demand higher, with estimates putting demand at double the current in just 2 years.
Botswana is in a unique position to take advantage of this as BCL re-opening is a card that the current administration seeks to play. With foreign investors such as BHP and Cobrecoming into play , the Kalahari Copper Belt (where the most copper deposits are thought to lay) is seeing more action.
Cant wait to see how it plays out.
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The San African 
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