Botswana has established a new sovereign wealth fund aimed at economic diversification, job creation, and management of state-owned companies. This initiative comes as the Southern African nation faces a downturn in its diamond-dependent economy, which contributes roughly 75% of exports and one-third of fiscal revenue.
Unlike the existing Pula Fund, which primarily serves as a liquidity stabilization fund, the new fund is designed for growth and active asset management, including some state-owned enterprises. Officials emphasized that the fund will focus on generating returns without dipping into its capital, and it may invest both domestically and internationally.
Botswana’s economy contracted 3% last year, with further slowdown expected in 2025 due to declining diamond revenues. The fund represents a strategic step to diversify the economy, strengthen public finances, and create sustainable employment opportunities for the nation.