On Sept. 12, 2025, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Botswana to 'BBB' from 'BBB+'. The outlook is negative. At the same time, we affirmed our 'A-2' short-term foreign and local currency sovereign credit ratings.
We equalize our ratings on the Bank of Botswana (BOB) with our ratings on the sovereign and we therefore lowered our long-term issuer credit ratings on the central bank to 'BBB' from 'BBB+' and affirmed the 'A-2' short-term issuer credit rating. The outlook on the BOB is negative.
We also revised our transfer and convertibility (T&C) assessment on Botswana to 'BBB+' from 'A-'.
Outlook
The negative outlook reflects our view that weak global demand for diamonds and depressed prices will likely keep Botswana's exports and fiscal revenue subdued, complicating the government's fiscal consolidation agenda. The negative outlook also reflects that Botswana's external and public balance sheets could erode further.
Downside scenario
We could lower our ratings if Botswana's fiscal and external performance proved materially weaker than our forecast. This could happen, for instance, if diamond demand and GDP growth do not recover from their current lows or if fiscal consolidation stalls, leading to further weakening of Botswana's fiscal and external position.
Upside scenario
We could revise the outlook to stable if Botswana's GDP growth and fiscal and external metrics improved significantly, for example, due to a sustained rebound in diamond markets. Longer-term upside could also stem from successful implementation of policy efforts to diversify Botswana's commodity-concentrated economy, exports, and tax base.
