Non-mining GDP to tumble as gov't cash woes worsen
Lewanika Timothy | Thursday June 12, 2025 12:17
Non-mining GDP held the fort last year as the only growing sector of the economy, containing a contraction of economic output to negative three percent, which could have been worse if non-mining GDP did not grow at by four percent.
Prominent economist Keith Jefferis said during an economic update shared this week in Gaborone that the non-mining GDP this year would take a nosedive as government spending slows and payments to suppliers continue to stall from government.
“The non-mining GDP which performed positively registering a four percent growth last year may likely not grow as much this year. “This is because government’s slowed spending in the economy will have knock-on effect on the non-mining sector. Also, delays in payment to the private sector will add to the slowdown,” he said
In economics, non-mining GDP refers to the Gross Domestic Product (GDP) of an economy, excluding the value added by the mining sector. Essentially, it is a measure of economic output from all industries such as tourism, manufacturing, retail, real estate and others.
According to GDP figures from Statistics Botswana, mining and quarrying sector output fell by 24.1% last year, whilst the diamond traders sector contracted by 34.1%. Both sectors’ contributions are traditionally critical for the economy.
In 2023, mining and quarrying grew by 2.9 percent whilst diamond trading contracted by 26.8%, reflecting the onset of the diamond slump which is yet to level out.
The data agency’s figures show that in the non-mining sector, only agriculture and manufacturing recorded declines during 2024, at -0.3 percent and -0.25 percent respectively. Whilst the agriculture sector’s decline was expected given the record El Niño drought that affected the year, the manufacturing’s contraction from 1.9 percent growth in 2023, will be worrying.
This year the picture is grimmer because the cash crunch facing government is spilling over as delays in payments which threatens operations and the survival of the private sector. Jefferis also said that acquiring capital for expansion will be more expensive as capital markets are not liquid enough to meet the needs of the private sector.
In his budget speech in February, Finance Minister Ndaba Gaolathe had initially forecast that the economy would grow by 3.3 percent. However, this week, financial officials said they expected either zero growth or a contraction, due to the prolonged nature of the diamond downturn, as well as the impact of the Trump administration global tariffs.