(Bloomberg) -- Botswana plans to reduce spending on new vehicles and travel for government officials and may delay some capital projects to deal with a slump in diamond revenues, according to its finance minister.
“We have to seriously reduce the pace of spending, and we are looking at areas such as procurement of vehicles, computers, workshops and travel that is funded by government,” Finance Minister Peggy Serame told lawmakers on Monday.
Budget revenue in first quarter of the fiscal year starting April was about 28% lower than the targeted 23.4 billion pula ($1.7 billion) due to lower diamond revenues and sales, Serame said. “If things do not improve, we will also have to look at delaying some projects that we had planned,” she said.
Botswana is the world’s largest producer of rough diamonds by value with the revenues making up the bulk of the southern African country’s budget receipts. Global diamond sales have been impacted by too much supply, poor demand from the crucial Chinese market, pressures from lab grown gems and inflation-hit consumers.
The budget pressures come as the nation prepares to hold elections in October in which President Mokgweetsi Masisi is seeking reelection.
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