IMF projects -0.4% growth for Botswana economy in 2025

Botswana’s economy is projected to grow by -0.4 percent in 2025, marking a second consecutive year of economic decline, according to the latest World Economic Outlook by the International Monetary Fund (IMF).

The IMF’s April 2025 update forecasts a real GDP growth rate of -0.4 percent for Botswana in 2025, following an even sharper contraction of -3.0 percent recorded in 2024. However, the country is expected to rebound modestly with a 2.3 percent growth rate in 2026.

The projected decline places Botswana among the few Sub-Saharan African nations expected to experience negative growth in 2025. 

Equatorial Guinea is forecast to see the sharpest contraction at -4.2 percent, while South Sudan, despite a staggering -27.6 percent in 2024 and -4.3 percent in 2025, is projected to surge with a 64.5 percent rebound in 2026.

In contrast, many of Botswana’s regional peers are projected to perform strongly. Rwanda is expected to grow by 7.1 percent, Ethiopia by 6.6 percent, and Zambia by 6.2 percent in 2025. Senegal is forecast to grow 8.4 percent in 2025. Growth also remains uneven across the region. Senegal is forecast to grow 8.4 percent in 2025. 

Nigeria is projected to grow at 3.0 percent in 2025, and South Africa at 1.0 percent.  

Côte d’Ivoire and Benin are expected to grow 6.2 percent and 6.5 percent, respectively.

On average, the Sub-Saharan African region is projected to grow at 3.8 percent in 2025, slightly down from 4.0 percent in 2024, but expected to recover to 4.2 percent in 2026.

Botswana’s sluggish outlook comes amid broader concerns about declining diamond exports, fiscal pressures and a challenging global environment. 

The IMF did not provide specific details on the underlying factors contributing to the decline but highlighted macroeconomic uncertainties across the region.

Local economists at an economic think tank, Econsult, have also warned that diversification efforts need to be accelerated to buffer the economy against commodity price shocks and external volatility.

 Econsult states in its first quarter of 2025 economic review that, “Our current estimate is that Botswana’s GDP will be flat, with zero percent growth. “ 

“The projected further reduction in diamond output will drag down overall growth, as in 2024, offsetting hoped-for positive growth in the non-diamond sector.”

Econsult says the early months of 2025 (extending beyond the first quarter into April)  have brought considerable uncertainty to an economy that contracted in  2024 and looks set to, at best, experience little or no growth in 2025. “The impact of the tariffs announced by the United States government in April is likely to be highly disruptive, especially to the diamond sector,” says Econsult. 

It says; 

“Domestically,  government finances remain under pressure, in part due to low mineral revenues, with large deficits and borrowing requirements squeezing the capital market and driving up interest rates,” says Econsult. 

Botswana had forecast its economy to grow 3.3 percent this year after a contraction in 2024, due to an expected recovery in the global diamond market. 

“This growth outlook is premised on recovery of the diamond industry, which is expected in the latter part of 2025, and continued positive sentiment in the non-diamond mining sectors,” Finance Minister Ndaba Gaolathe said in his maiden budget speech in February.