Botswana has a small, but dynamic, manufacturing sector, which contributed approximately 5% to GDP in 2001. Average growth in this sector during the 1990s was 3.8%, and it is seen in the early 2000s as having the most growth potential in the country. The sector has diversified into textiles, beverages, chemicals, metals, plastics, and electrical products. The government parastatal, the Botswana Development Corp., has declined in significance relative to private initiatives, but still is a major promoter of industrial development with interests in brewing, sugar, furniture, clothing, tourism, milling, and concrete. Though promising, industrial development is limited by a small domestic market, weak infrastructure, import dependence, and small skilled labor force.
Local coal supplies the fuel required for Botswana's energy sector. Peak requirements are generally supplied by the South African grid. In 1991, Botswana also linked to the Zambian and Zimbabwean grids. Botswana has no hydroelectric power resources, but solar power has potential as an energy source.
The construction industry was the fastest growing sector of the economy in the 1980s, and rapid urbanization created a need for low-income housing. This sector has decreased in importance, however, as there has been a shortage of building material and supplies. On the other hand, the chemicals industry has expanded; soda ash (for use in steel, glass, paper, and detergent manufacturing industries) is an important commodity, and Botswana Ash is the leading soda ash company operating in the country. The production of copper and nickel has contributed to an increase in the local production of electrical components. The motor industry is growing, with vehicle assembly, tire manufacturing, leather finishing, paint manufacturing, batteries, and the manufacture of spare parts being government priorities and opportunities for foreign investment.
Mining and livestock production remain the primary economic activities. Mining accounted for 34.2% of GDP and an estimated 79% of the value of Botswana's exports in 2000. Botswana has been referred to as the world's largest diamond producer in terms of the quality and grade of its diamonds. The country's growth is heavily dependent upon developments in the diamond industry, which in turn is affected by global economic conditions. The slowdown in the global economy that began in 2001 thus adversely impacted Botswana's diamond industry. Botswana's diamond reserves are estimated to last 30 years at 2003 production rates, and the government emphasizes the need to diversify the economy.