Global credit rating agency Standard & Poor’s (S&P) last week downgraded Botswana’s sovereign credit ratings, citing subdued demand and declining prices in the diamond sector, factors that continue to weigh heavily on the country’s constrained economy and public finances.
The agency lowered Botswana’s long-term foreign and local currency sovereign credit ratings from ‘BBB’ to ‘BBB-’. Similarly, the short-term foreign and local currency sovereign ratings were downgraded from ‘A-2’ to ‘A-3’, while the economic outlook remains negative.
This downgrade follows recent forecasts projecting prolonged weakness in global demand for natural diamonds. The sector faces intensified competition from artificial diamonds alongside shifting luxury consumption patterns, which have driven a sharp decline in both prices and demand for natural stones since 2023. These developments have directly impacted Botswana’s government revenues, export earnings, and overall economic growth. In its update last week, S&P highlighted that lab-grown diamonds continue to rapidly gain market share. Statistics from the report indicate that lab-created diamonds now account for 20% of the global market by value and up to 50% by volume within the U.S. engagement ring segment as of 2025.
This content is locked
Login To Unlock The Content!