The agency cited mounting fiscal pressures and the government\u2019s difficulty in adapting to a structural downturn in the diamond industry.<\/p>\n
<\/p>\n
The agency said Botswana\u2019s economy is projected to contract by a further 6% in 2025, as the country remains highly exposed to global demand shocks, the rise of lab-grown diamond alternatives, and shifting consumer preferences.<\/p>\n
<\/p>\n
Independent Policy Researcher Kevin Tutani says the downgrade will make it more expensive for Botswana to borrow.<\/p>\n
<\/p>\n
\u201cInvestors, who are mostly institutional, are going to demand a higher rate of interest for whatever debt they give to the government of Botswana. Essentially, it\u2019s going to be harder and more costly to acquire debt,\u201d he explained.<\/p>\n
<\/p>\n
Tutani warned that the rise of synthetic diamonds poses a growing risk to Botswana\u2019s natural diamond market and urged the government to invest in aggressive marketing to preserve demand.<\/p>\n
<\/p>\n
\u201cBotswana has to get on the drive to market its natural diamonds. They have better inherent qualities than the synthetic ones. The country can team up with Russia and other major producers to push that message internationally,\u201d he said.<\/p>\n
<\/p>\n
He added that Botswana\u2019s overreliance on diamond revenues has made it vulnerable to external shocks, calling for greater fiscal discipline and efficiency in public spending.<\/p>\n
<\/p>\n
\u201cThe government has to cut off any excess waste within its procurement contracts. If it streamlines expenditure across all levels of government, it can save as much as two to three per cent of GDP and reduce the fiscal deficit,\u201d he said.<\/p>\n
<\/p>\n
Looking ahead, Tutani cautioned that further downgrades could follow if no concrete action is taken to address structural challenges, including unemployment and water scarcity. \u201cIf the government doesn\u2019t show a feasible plan to move things forward, then we will definitely most likely see another downgrade. But if it is seen to be doing something, then things can get better,\u201d he concluded.<\/p>\n
<\/p>\n
–ChannelAfrica–<\/p>\n","protected":false},"featured_media":13098,"template":"default||default","meta":{"_acf_changed":false},"news-type":[44],"class_list":["post-13097","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Credit ratings agency Moody\u2019s has downgraded Botswana\u2019s sovereign credit rating to Baa1 from A3. ||Credit ratings agency Moody\u2019s has downgraded Botswana\u2019s sovereign credit rating to Baa1 from A3. ","published_date":null,"news_description":"Credit ratings agency Moody\u2019s has downgraded Botswana\u2019s sovereign credit rating to Baa1 from A3. ||Credit ratings agency Moody\u2019s has downgraded Botswana\u2019s sovereign credit rating to Baa1 from A3. ","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/13097","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\/13097\/revisions"}],"predecessor-version":[{"id":18379,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/13097\/revisions\/18379"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/13098"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=13097"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=13097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}