Botswana should explore ways of strengthening economic and trade cooperation with other markets in response to punitive U.S. tariffs, a panel of business leaders and entrepreneurs has suggested.
The US recently imposed a 37 percent tariff on Botswana and business leaders are of the view that the country should look East as an alternative market, despite the importance of the U.S market, a major consumer of Botswana diamonds.
Statistics Botswana figures show that in January 2025, Botswana’s exports were mostly absorbed by Asia followed by SACU with market shares of 52.5 percent and 18.6 percent, respectively.
The EU received 6 percent of Botswana’s exports, while at the country level, Botswana’s top export destinations were the United Arab Emirates (UAE), South Africa, China, and Australia, at 20.9 percent, 17.5 percent, 15.6 percent, and 15.3 percent of total exports, respectively.
Exports to Asia were the highest at 52.5 percent (P1.6 billion), rendering the block the main destination market for Botswana, with diamonds and copper the major commodity groups exported to the continent, at 69.3 percent (P1.1 billion) and 29.7 percent (P474.7 million) respectively.
During the discussions, it became clear that the business community should work with the government to assist in negotiating with the US government over the tariffs, especially regarding the diamonds, which are the major export commodity.
It also emerged that there is a need to create a conducive environment to meet the demands of the alternative markets that Botswana intends to explore
The US, according to the January figures, accounted for 2.2 percent of Botswana’s total exports, around P110 million.
A Research Fellow at the Botswana Institute of Development Policy (BIDPA), Dr. Kedibonye Thompson, said during the discussion that developments in the global market, in particular trade tariffs, remain a challenge and create uncertainty.
She explained that this uncertainty affects investor confidence, which could lead to volatility in the commodity markets, including diamonds.
Thompson said this also creates a “wait and see” approach by the investors, even globally, which could likely result in fewer investments as the investors would wait to see how this unfolds.
Thompson said this will affect not only foreign investment but even domestic entities, as they may withhold production pending the outcome of the tariff implementation.
“We are yet to see how it unfolds, and as we wait, there is work to do as the government and the private sector,” Thompson said.
“There is a need for the private sector to work with the government on how to carry out the negotiations and also diversify the economy beyond the diamonds.”
Thompson argued that currently, it appears like there is a trade limit towards the Asian market and she said the market is not only important for Botswana, but for most parts of the continent.
She implored the country to further explore the market and tap into potential benefits.
Botswana Chamber of Mines (BCM) CEO, Charles Siwawa, said tariffs typically increase costs in one way or the other.
“Some of the increases in costs will push profitability downwards to a point where it can reach negative profitability,” Siwawa said.
“When it comes to mining, many businesses are operating very marginally in terms of profitability.”
Siwawa stated that some mines in Botswana are about to come into production and therefore have to incur additional costs in terms of tariffs.
“Some of those mines might not see the light of day because they simply cannot afford to carry on,” he said.
Siwawa asserted that tariffs by nature are bad for a producer of goods.
He said while producers can choose to pass the costs to a consumer, Siwawa cautioned that it comes at a risk because consumers may shun the product.
Siwawa further warned that should there be no positive outcomes from the negotiations, he predicts a bleak future for the country.
According to Tecla Evans, Manufacturing Sub Committee chairperson at Business Botswana, the tariffs will reverse gains made through the African Growth Opportunity Act (AGOA) to make Botswana products competitive.
“If the industry does not have a competitive advantage in terms of the US market, it means there will be less employment for the sector,” argued Evans.
“This trickles down to the general economy of the country. This does not apply to the textile industry only, but the whole manufacturing industry.”
Evans said it is important that the sector continues working on improving competitiveness in terms of integrating technology into production as well as improving skills.
