An IMF mission led by \u00c9douard Martin concluded its annual Article IV consultation in Gaborone last week, warning that the economy is set to contract by around 1% in 2025, after a 3% decline last year. This follows a 24% fall in mining output in 2024, as the industry struggles with lower demand from China and rising competition from lab-grown diamonds.<\/p>\n
Non-mineral growth has also slowed, registering just 2.8%, while fiscal and external balances have weakened. The current account moved from a surplus of 1.5% of GDP in 2023 to a deficit of 4.2% in 2024, and international reserves fell to about five months of import cover.<\/p>\n
On the fiscal side, the deficit widened to 7.1% of GDP in 2024\/25, driven by lower mineral revenues and higher recurrent spending. Public debt has now climbed above 30% of GDP. Inflation has remained below the Bank of Botswana\u2019s 3\u20136% target range, but is expected to pick up in the coming months following a recent depreciation of the Pula. The central bank has kept its policy rate unchanged at 1.9% since August 2024.<\/p>\n
While Botswana\u2019s banking sector remains well capitalised and profitable, the IMF cautioned that liquidity has tightened, urging the authorities to speed up implementation of financial sector reforms.<\/p>\n
Martin said growth and job creation will depend on a \u201cfundamental shift\u201d towards greater private sector participation, a more diversified export base, and a leaner public sector.<\/p>\n
The Fund welcomed government initiatives under the Botswana Economic Transformation Programme, but called for further reforms in revenue mobilisation, state-owned enterprise management, and reducing bureaucratic barriers for business.<\/p>\n
\u201cWith the right reforms, growth could recover to more than 4% in the medium term,\u201d Martin noted, emphasising the importance of aligning the measures with the country\u2019s new five-year National Development Plan.<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":12774,"template":"default||default","meta":{"_acf_changed":false},"news-type":[44],"class_list":["post-12773","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"The International Monetary Fund (IMF) has urged Botswana to accelerate reforms to stabilise its economy and drive diversification, following a sharp downturn linked to persistent weaknesses in the diamond sector.||The International Monetary Fund (IMF) has urged Botswana to accelerate reforms to stabilise its economy and drive diversification, following a sharp downturn linked to persistent weaknesses in the diamond sector.","published_date":"2025-09-27 00:00:00||2025-09-27 00:00:00","news_description":"","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/12773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/12773\/revisions"}],"predecessor-version":[{"id":18213,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/12773\/revisions\/18213"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/12774"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=12773"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=12773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}