Grace Ashiru
Botswana, Africa’s leading diamond producer, is accelerating efforts to diversify its economy with the introduction of a new Citizenship By Investment (CBI) programme, unveiled in September 2025. This initiative comes as the country faces a deepening economic contraction, exacerbated by a global downturn in the diamond market.
The nation’s economic difficulties are reflected in the recent figures: Botswana’s GDP contracted by 3% in 2024, with the downturn worsening in 2025. The economy shrank by a dramatic 5.3% year-on-year in Q2 2025, marking the sharpest contraction since the second quarter of 2020.
The root cause of this economic strain lies in the country’s diamond sector, which has seen a significant slump. Rough diamond sales plummeted by over 40% in the first half of 2025. On September 25, 2025, the Okavango Diamond Company (ODC), a state-owned entity, made the unusual decision to withdraw a 1 million-carat auction rather than accept significantly low bids, signaling the severity of the crisis. With diamonds contributing about one-third of Botswana’s government income, the sector’s decline is putting immense pressure on the economy.
The challenges in the diamond industry are compounded by broader global issues, such as high inflation, a slowdown in China’s housing market, and the growing presence of lab-grown diamonds, which have captured a sizable portion of the engagement ring market, further eroding demand for natural diamonds.
In response, the Botswana government is launching its Impact Investment Programme, part of a broader strategy to revive the economy and attract new sources of revenue. Set to begin in early 2026, the Citizenship By Investment (CBI) programme will offer a preliminary contribution requirement between USD 75,000 and USD 90,000, positioning it as one of the most affordable programs of its kind globally. The government hopes that this programme will attract foreign investment into key sectors such as luxury tourism, renewable energy, financial services, housing, and mining beyond diamonds.
To help structure the programme, Botswana has contracted migration-for-business experts Arton Capital, who will assist in finalizing the CBI’s application process and eligibility criteria. Although full details are still pending, the programme will encourage investment in sectors vital to the nation’s diversification away from diamonds, which have traditionally been the cornerstone of Botswana’s economy.
The government’s move to diversify is urgently needed. Fitch Solutions recently downgraded Botswana’s credit rating to ‘BBB’ with a negative outlook, while the fiscal deficit for the 2024/2025 year is expected to reach a staggering 9.2% of GDP. Additionally, the country’s agricultural export sectors, including livestock and frozen beef, have also been hit hard. A Foot-and-Mouth Disease outbreak earlier in 2025 caused significant disruptions, further straining Botswana’s exports and leading to border restrictions.
To address these issues and secure a more stable financial future, the government is also focused on strengthening its financial position through the launch of a Sovereign Wealth Fund in September 2025. Together with the CBI programme, this represents a multi-faceted strategy designed to inject much-needed cash, expand employment opportunities, and reduce the country’s heavy reliance on diamonds.
