Experts urge Tanzania to learn from Botswana’s diamond crisis

Tanzania, on the other hand, has managed to sustain growth by diversifying its export base. According to the Bank of Tanzania (BoT), gold exports earned $3.804 billion (Sh9.89 trillion) in the year ending June 2025, up from $3.121 billion (Sh8.12 trillion) a year earlier, supported by favourable global prices and central bank purchases.

This growth also pushed total exports of goods and services to $16.9 billion, compared with $14.4 billion in the year ending June 2024. Agricultural exports, notably maize and rice, more than tripled to $501.3 million (Sh1.25 trillion), driven by demand from neighbouring countries.

Gold is Tanzania’s leading foreign exchange earner, followed by tourism.

Independent economist, Dr Donath Olomi said Botswana’s predicament underscores the dangers of relying too heavily on one export.

“For many years, Botswana depended almost entirely on diamonds. When demand fell, the economy was left vulnerable. Tanzania is in a stronger position because our revenues come from a variety of sectors,” he explained.

He cautioned, however, that a similar risk could arise if Tanzania was to rely excessively on natural gas once production and processing expand. “If we depend on gas too much, any disruption in prices or markets could expose us to the same fate,” he said.

Economist Prof Aurelia Kamuzora from Mzumbe University, added that Tanzania must invest more in value addition to agricultural products and minerals to broaden its income base.

“We must not assume we can manage alone. We should invite partners to help us improve value chains in agriculture and mining so that our foreign income sources are diversified,” she advised.

Prof Kamuzora stressed the need for strong systems to manage crops such as coffee, while also ensuring that investors have access to financing.

Another expert, Mr Oscar Mkude, said Botswana’s vulnerability stems from its dependence on diamonds and tourism.

“When global buyers cut back on diamonds or tourist arrivals decline, Botswana immediately loses revenue. By contrast, Tanzania has several income streams. During Covid-19, for instance, agriculture continued to grow even as tourism collapsed,” he said.

Botswana’s crisis

Botswana, which has 2.5 million people, is among the world’s top diamond producers. Diamonds account for nearly 80 percent of its foreign exchange earnings and about a quarter of its GDP, according to the International Monetary Fund (IMF).

However, prolonged weak demand has battered the industry. In June, Debswana—a joint venture between the government and mining giant De Beers—halted operations at some mines, projecting production at 15 million carats this year, about 40 percent below 2023 levels.

The company’s revenues fell nearly 50 percent last year, according to the BBC.

President Duma Boko declared a public health emergency on August 26, citing shortages of essential drugs and equipment. In a televised address, he unveiled a Pula 250 million (£13.8 million) emergency plan to overhaul the health supply chain under military supervision.

He warned that the shortages had driven medicine prices to between five and ten times higher than usual. Earlier, the Health Ministry revealed debts exceeding Pula 1 billion (Sh187 billion), much of it from patients resorting to private hospitals.

Health Minister Dr Stephen Modise said the shortages affected critical treatments, including cancer, HIV and tuberculosis care. The situation was worsened by reduced US aid, which previously covered one-third of Botswana’s HIV programme, according to UNAIDS.