Addis Ababa, October 12/2025 (ABN)
The International Monetary Fund (IMF) has cautioned Botswana to avoid the economic pitfalls that devastated Zambia and Nigeria, emphasizing the urgent need to diversify beyond diamond dependence.
Speaking during the Bank of Botswana’s 50th Anniversary Symposium in Gaborone, Abebe Aemro Selassie, Director of the IMF’s African Department, underscored that history offers “sobering reminders” of how over-reliance on a single commodity can threaten national stability.
“The key lesson is simple yet critical: commodity dependence without adequate buffers is dangerous,” Selassie noted. “When prices fall, the absence of fiscal and external cushions can turn a terms-of-trade shock into a full-blown crisis.”
He pointed to Zambia’s experience in the 2010s, when a sharp drop in global copper prices pushed the nation into unsustainable debt and an IMF-backed adjustment program. Similarly, Nigeria’s heavy reliance on oil has repeatedly triggered fiscal and currency crises whenever global oil markets weakened.
Selassie further cited Venezuela as “the starkest cautionary tale,” where collapsing oil revenues and governance challenges led to hyperinflation and economic collapse.
The IMF’s message serves as a timely warning for Botswana to strengthen its economic resilience by building fiscal buffers, encouraging private sector growth, and diversifying exports beyond diamonds — the cornerstone of its economy for decades.
