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Market NewsNewsBotswana's Central Bank urges tax overhaul as growth in diamond revenues has plateaued

Botswana's Central Bank urges tax overhaul as growth in diamond revenues has plateaued

Botswana’s central bank has urged the government to overhaul the southern African nation’s tax regime and prepare the economy for declining contributions from diamonds, Bloomberg reported.

Botswana relies on the gemstones for almost a fifth of its gross domestic product and used the revenue generated from sales to transform the nation from an economic backwater into one of the continent’s wealthiest societies. However, their role is set to diminish over the next 20 years and successive governments have struggled to diversify the economy, said the Bloomberg report.

Although the government has been able to finance most investment projects from diamond sales, “there is recognition that growth in diamond revenues has plateaued and might recede in the future,” the Bank of Botswana said in a study published Friday as part of its annual report. “It is thus important to explore alternative and sustainable sources of financing for public infrastructure,” the Bloomberg report said.

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