S&P raises Botswana’s outlook to positive on diamond recovery

Buzzing again: Diamond sector recovery is leading the economy's rebound
Buzzing again: Diamond sector recovery is leading the economy's rebound

Global credit ratings agency, S&P yesterday revised its view of the country's outlook to stable from negative, citing stronger prospects for economic recovery.

In a statement, the agency said the recovery in the diamond sector would underpin the expected economic rebound.

The country's main diamond producer, Debswana reported production of 10.7 million carats for the first half of the year, 43% higher than the corresponding period last year.

Other developments at Khoemacau and Minergy have also lifted prospects for a healthy economic bounce back led by mining.

"S&P expects economic recovery to be driven by the anticipated strong recovery in the diamond market which, in turn, should result in a substantial improvement in the domestic fiscal and external sectors’ performance over the next two years," the ratings agency said.

S&P researchers also noted the country's "robust and predictable" institutional and monetary policy frameworks, modest net general government debt levels and relatively strong net external position, in justifying their review of the outlook.

The credit ratings agency downgraded Botswana’s outlook to negative last September, citing higher pressures on Botswana’s economic, external and fiscal performance over the next two years. The agency said this was in light of COVID-19 and the impact on diamond exports. Ends...

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