The Bank of Botswana issued a statement on Moody’s Investors Service’s latest review of Botswana’s sovereign credit rating, which cut the long-term local and foreign currency issuer ratings one notch from A3 to Baa1 while affirming a negative outlook. The central bank noted that the rating remains investment grade. Moody’s linked the downgrade to structural challenges in the diamond industry that have moderated economic activity, pressured external buffers and contributed to a gradual rise in government debt, with global diamond market conditions still subdued since the April 2025 outlook revision to negative. The agency highlighted Botswana’s institutional strength and policy discipline as stability anchors, and said export earnings, Southern African Customs Union receipts, fiscal consolidation and progress on economic diversification and transformation will be key determinants of the sovereign credit profile, consistent with government measures to strengthen public finance management, preserve official foreign exchange reserves and implement the Botswana Economic Transformation Programme and National Development Plan 12 strategies.
Bank of Botswana 2025-10-17
Bank of Botswana summarises Moody’s downgrade of Botswana’s sovereign rating from A3 to Baa1 with negative outlook affirmed
The Bank of Botswana announced Moody’s downgrade of Botswana’s sovereign credit rating from A3 to Baa1, maintaining a negative outlook but still investment grade. The downgrade is due to structural challenges in the diamond industry affecting economic activity and external buffers. Moody’s emphasized Botswana’s institutional strength and policy discipline, noting that export earnings, fiscal consolidation, and economic diversification will be crucial for the credit profile.