Botswana is considered one of few sustainable success stories in sub-Saharan Africa during the last half century. The discovery of diamonds after independence resulted in staggering long-term economic growth and an impressive development trajectory. In this chapter we argue, however, that economic progress has not been without its challenges. While the country has avoided becoming the victim of a natural resource curse, it is locked into a natural resource trap. Next to the profitable diamond sector the economy has not managed to diversify and especially problematic is that there has been no development of a productive manufacturing sector.