Botswana President Ian Khama has warned of a sharp slowdown in economic growth this year as reduced global demand for diamonds, the country’s largest foreign currency earner, hits the mining sector.
Khama said in his annual state of the nation address to parliament that growth was expected to slow to 3.5 percent from 8 percent last year due to a fall in mining output.
The government's budget plans in February forecast 4.4 percent this year, rising to 5 percent in 2013.
"The diamond market has been significantly affected," Khama says in comments cited by BusinessDay. "We expect this to adversely affect our economy, as diamonds are still a significant contributor to our gross domestic product."
He said the fall in demand for diamonds was due to economic conditions in the eurozone, China, India, and the United States.
He also cited the International Monetary Fund’s World Economic Outlook warning of continued weakness in leading and major emerging markets.