Botswana’s President Duma Boko has warned that the current economic model that relies heavily on diamonds is unsustainable and is a “social time bomb” amid rising youth unemployment.

Speaking at a strategic cabinet workshop to discuss the Botswana Economic Transformation Programme (BETP) on Wednesday, Boko said the country must urgently move away from its decades-long dependence on diamond revenues, which have underpinned the economy since independence but now pose structural risks.

“The limitations of this reliance are increasingly unbearable,” he said. “If left unaddressed, there is a real risk of the situation becoming not just an economic challenge but a social time bomb.”

Botswana’s diamond industry, dominated by the Debswana joint venture between the government and De Beers, accounts for nearly 70 percent of export revenue and a significant portion of gross domestic product (GDP).

However, global demand for natural diamonds has slumped in recent years, exacerbated by competition from lab-grown alternatives and economic headwinds in key markets.

The downturn has led to mass layoffs, with Debswana announcing in May that it would cut 1,000 jobs and the country’s unemployment rate climbing to 27.6 percent in early 2024.

The BETP outlines a shift toward agriculture, tourism, manufacturing and digital services, with a focus on inclusive growth and measurable outcomes.

Botswana’s government wants to take a controlling stake in De Beers, the country’s mining minister said, casting another shadow over the sale of the diamond producer by owner Anglo American, The Financial Times reported. 

Bogolo Kenewendo said Boko “remains resolute in his quest to increase Botswana’s stake in De Beers to ensure Botswana’s full control over this strategic national asset and the entire value chain including marketing”. 

Botswana’s budget deficit is expected to widen to 7.5% by 2026. The country recently borrowed $300mn from the African Development Bank to help tackle the budget deficit.