Botswana Urged to Speed Up Reforms as Economy Faces Prolonged Slowdown

According to the first Botswana Economic Update, the country now faces rising debt, slower job creation and mounting pressure to diversify its economy before these challenges become more difficult to manage.

Botswana's economy has entered a difficult phase after shrinking by 2.8% in 2024 and another 0.7% in 2025, with weaker diamond revenues weighing heavily on growth and public finances. According to the first Botswana Economic Update, the country now faces rising debt, slower job creation and mounting pressure to diversify its economy before these challenges become more difficult to manage.

The report, Seizing the Moment: How Botswana Can Turn Crisis into Opportunity, notes that public debt has climbed from 22% of GDP in 2023 to almost 40% in 2025, making fiscal reform increasingly urgent. It presents two possible futures for the country. One would keep Botswana dependent on diamonds with only limited reforms, leaving it exposed to external shocks and slower economic progress. The other would accelerate economic transformation through private sector growth, broader industrial development and stronger investment in people.

Private sector growth and fiscal reforms seen as key to recovery

The report identifies four priorities that could help Botswana build a more resilient economy. The first is restoring fiscal stability by improving public spending, strengthening revenue collection and increasing oversight of state-owned enterprises. It also calls for creating a stronger business environment that encourages private investment, improves access to finance and supports new industries beyond mining.

Investment in education, healthcare and social protection is presented as another essential step for improving productivity and expanding employment opportunities. The report also highlights the country's natural resources, recommending better water management, wider use of renewable energy and climate-smart development to support long-term economic resilience. These reforms form part of the broader Botswana Economic Transformation Programme (BETP), which seeks to reduce reliance on diamonds while creating a more balanced and competitive economy.

Skills development placed at the heart of economic transformation

A major focus of the report is the need to reshape Botswana's education and training system so that it matches the changing needs of employers. It recommends building employer-led partnerships that connect businesses, training institutions and government to prepare workers for industries with growing demand.

The report also proposes expanding apprenticeships, internships and workplace learning opportunities through the Human Resource Development Fund (HRDF), giving young people practical experience before entering the labour market. Greater autonomy for Technical and Vocational Education and Training (TVET) institutions is recommended so they can respond more quickly to industry needs while being judged on graduate employment outcomes.

Reforming skills financing is another priority, with greater support directed towards disadvantaged learners and programmes that deliver stronger employment results. The report concludes that placing productive jobs at the centre of economic policy will help Botswana strengthen its private sector, improve productivity and build a more diversified economy that creates lasting opportunities beyond the diamond industry.