In presenting the national budget, Finance Minister Ndaba Gaolathe said that achieving the growth forecast would require urgent action to accelerate diversification and expand non-mining sectors.
Economic Analyst Tshepo Kgadima, speaking to Channel Africa on Tuesday, said the projection was realistic, provided the government improved fiscal discipline and prioritised areas that support broad economic growth. He noted that concerns remained around the structure of public spending, pointing out that the budget for the Office of the President exceeded allocations for lands and agriculture, despite the importance of agricultural development for long-term diversification.
Kgadima also expressed concern that the government had grouped minerals and energy under one umbrella. He warned that Botswana could repeat the mistakes made in other countries that rushed into energy transition commitments without securing sufficient baseload electricity. He argued that successful diversification would require reliable and affordable energy supplied at all times, calling this a critical foundation for economic expansion.
Turning to the mining sector, Kgadima said diamonds continue to dominate Botswana’s economic landscape. Diamonds account for roughly one-third of national output. However, he said the global shift towards critical minerals and rare earths presents an opportunity for Botswana to reposition itself. He believes the country could unlock large economic gains by developing new mineral value chains supported by improved economic infrastructure, which would in turn help Botswana surpass its current growth forecast.
Addressing the vulnerability of the economy to fluctuations in global diamond demand, Kgadima said Botswana has a rare opportunity to change its revenue model. He explained that Botswana earns most of its diamond income at the mine gate rather than at the high-value end of the market. He proposed that Botswana should form a consortium with Angola, Namibia and South Africa (SA), using sovereign wealth funds and public pension funds to acquire De Beers. This, he argued, would allow producer countries to move up the value chain and benefit from sales further downstream, reducing dependence on volatile rough diamond markets.
Outside the mining sector, Kgadima identified tourism and agriculture as the main engines that could drive non-mining growth. He said Botswana’s long-standing tourism strategy of maintaining low visitor numbers and high prices needs to be reconsidered. With global tourism rebounding strongly, he argued that Botswana has not fully tapped into the mass market despite offering one of the most attractive tourism products on the continent.
On agriculture, Kgadima said Botswana possesses vast tracts of land but lacks effective strategies to increase agricultural output. He emphasised that both tourism and agriculture are labour-intensive sectors that could significantly reduce unemployment, which is becoming a growing risk to social and political stability. To unlock this potential, he said Botswana must invest in water systems, roads, railways and other essential economic infrastructure.
For example, despite access to the Zambezi River, Botswana has not fully utilised the opportunity to secure large-scale water transfers that could transform farming capacity in the country. He added that improving logistics is essential for a landlocked country. Expanding rail links through SA and via the Trans Kalahari route into Namibia would strengthen trade competitiveness and reduce transport costs.
Although Botswana regularly announces ambitious development plans, Kgadima warned that execution remains the government’s biggest weakness. He said governments often make bold commitments during budget season but fail to deliver on them, adding that effective implementation will determine whether the country can sustain or exceed the projected 3.1% growth.
–ChannelAfrica–
