27 Apr 2025

Business Botswana recently brought together industry players to discuss the impacts of the imposed 37 per cent tariff by the United States on Botswana export and what the country can do to escape the resulting challenges. 

During a panel discussion held in Gaborone, panelists were of the view that as a consuming nation, the impact of tariffs imposed on countries trading with the US would directly affect the economy of Botswana.

Economy expert, Dr Pelotshweu Moepeng, said the situation should not be ignored as the US was among the country’s top 10 export trade partners, noting that in 2023 Botswana’s exports to the US led by diamonds amounted US$ 110 million.

He said the hike in tariffs meant that Botswana would not export as it used to and such would have ripple effects on revenue. Dr Moepeng said the country was in dire need to develop its infrastructure mainly roads and health services as well as implement the new agriculture strategy to improve food production, investor attraction and regional trade.

Sharing her understanding of tariffs, Dr Kedibonye Thompson, Research Fellow at BIDPA said the tariffs would weaken the economies of countries dependent on the US market and trigger inflation.

Since Botswana’s manufacturing sector was importing machinery, she said it was likely to experience a hike in prices. Dr Thompson said the US tariffs policy resulted in uncertainty across the globe and was likely to affect production, economic growth and increase current challenges.

She said the situation had negative impacts on Botswana’s economy, adding that with challenges the anticipated growth of the GDP by 3.3 per cent was highly unlikely to be realised.

Dr Thompson said it was time for private sector to work even more closely with government to inform decision-making and policy direction.

Secretary of Botswana Diamond Manufacturers Association (BDMA), Mr Gihan Llangakoon-Pluczenik, said the introduction of tariffs was a reminder of what happened three years ago when polished diamonds market slummed due to infiltration of lab-grown diamonds which gravely impacted Botswana’s economy.

He said in March this year following the signing of the new sales agreement with DeBeers, the sector saw a glimmer of hope. He said whatever the amount of tariffs to be imposed would have consequences and observed that the impact of the tariffs could not be absorbed by an industry that was already bleeding. “It will create a further drop in the sales of polished diamonds and will encourage growth on lab grown diamonds,” he said.

For his part, Botswana Chamber of Mines chief executive officer Mr Charles Siwawa, said the introduction of tariffs coupled with lab-grown diamonds in the market would mean reduced revenue generation for the country.

By nature, Mr Siwawa said tariffs were a burden to producers of goods. He said negotiations on the tariffs was a give and take, and wondered if there was much Botswana could offer in order to get zero tariffs.

Chairperson of Business Botswana Manufacturing Sector, Ms Tecla Evans, said the sector was exporting products to the US through AGOA and the introduction of tariffs came at a time when the sector was still advocating for a better share of the market. “AGOA was meant to help us grow and become more competitive and the tariffs will make us less competitive,” she said.

As such, she said the setback would impede their focus of improving on competitiveness through improved skills and technological advancement to increase speed of production and quality of products.

Mr Gofaone Mapitse, chairperson of Mosisedi Farmers Association said the sector too was not spared as the country exported citrus products to the US. He said the US was a lucrative market and advised while negotiating for a better deal, it was equally important to establish alternative markets. “In the short term, the impact will be minimal, but we are still assessing what will happen in the long term,” he said. ENDS