Botswana weighs tax hikes as diamond slump hits state revenue

Botswana is feeling the pinch as a slump in diamond sales forces the government to consider raising taxes. Diamonds are the backbone of the economy, but global demand has weakened, prices are down, and production has slowed, leaving a big hole in state revenues.

To plug the gap, lawmakers are weighing higher income and corporate taxes, a move officials say is necessary to contain a growing budget deficit.

But it won’t be painless. Businesses and households are likely to feel the impact, even as the government tries to protect public services and avoid deep spending cuts.

Botswana’s biggest producer, Debswana, has already cut output and warned the diamond market may not recover quickly, pushing the country to rely more on non-mineral taxes.

The debate now is how to balance short-term pain with long-term stability as Botswana looks to reduce its dependence on diamonds and weather a tough economic moment.