The ratings are supported by Botswana's strong government balance sheet, well-managed minerals-based economy, and long record of political stability. The ratings are constrained by the country's narrow economic base, which relies heavily on the diamond sector and is vulnerable to shocks, despite efforts to diversify. Fiscal and inflation challenges and still-significant development needs are further rating constraints. Botswana's stable politics, track record of prudent economic policies, and high transparency are strong by emerging market standards. However, the country's narrow economy, incomes that are among the lowest in the 'A' category, high unemployment, and a high incidence of HIV/AIDS are key credit constraints. Botswana is one of the world's largest diamond producers, and the diamond industry remains the country's economic locomotive.
