Botswana’s discovery of a 2,492-carat diamond, the world’s second-largest gem-quality stone, at Lucara Diamond Corp’s Karowe mine, highlights a paradox in the nation’s economic landscape. While diamonds have transformed Botswana from one of the world’s poorest nations into an upper-middle-income country, the nation remains heavily dependent on this single commodity, which accounts for 80% of export earnings. Because of this over-reliance, Botswana is vulnerable to fluctuations in global diamond markets, as is evident in the first half of 2024 when diamond sales dropped by 49.2%. Unfortunately, the country’s diamond wealth hasn’t translated into widespread prosperity for its citizens. Botswana struggles with high youth unemployment, persistent poverty, and economic inequality. The government has tried to address these disparities by passing local ownership laws so Botswana can retain more profit from its natural resources. However, experts believe the policy could backfire and deter foreign investment, especially with the recent decline in the sector.
SOURCE: VENTURES AFRICA
Botswana’s 2,492-Carat Diamond Highlights Economic Paradox
