06 Feb 2025

The phrase “do more with less’ has become a catchphrase in government corridors as the newly elected government has been forced to maneuover with limited finances while faced with challenges emanating from high rate of unemployment to dilapidated public infrastructure.

The peep into the Budget Strategy paper, however, sees a government determined to uplift the lives of Batswana and to attain this, its priority remains economic recovery and growth. Much of the 2024/25 financial year has been affected by poor economic performance, emanating from a decline in mining revenue due to weak performance in the diamond industry.

The economy grew by an average 2.9 per cent during the first half of 2024 from 4.3 per cent same period in 2023. Key economic indicators show that the balance of payments have come down from a surplus of P5.8 billion in 2023 to a deficit of P5.8 billion in 2024.

Overall, the government is faced yet again with another year of budget deficit, which is projected to be P11.3 billion as the government expected revenues of P85.4 billion against an expenditure of P96.7 billion for the 2025/26 financial year.

Mineral revenues are expected to reach P17.2 billion while non-mineral income tax is expected to register P23.6 billion. According to the Budget Strategy paper, Southern African Customs Union (SACU) receipts are anticipated to decline to P23.3 billion and the Value Added Tax is expected to register P16.7 billion. An amount of P700 million is expected from Bank of Botswana revenue.

The deficit will be financed through both domestic and external borrowing. The Budget Strategy Paper, which has been presented to different stakeholders such as legislators, members of Ntlo ya Dikgosi and the general public, indicate that as at the end of September 2024, the level of public debt stood at P70.5 billion, with P27.2 billion owed to external lenders and P43.2 billion owed to domestic lenders.

Government believes there is still room for borrowing as the debt level stood at 25.5% of the GDP.

The next budget marks the beginning of the National Development Plan (NDP) 12 and the budget for 2025/26 will focus on building an inclusive economy, improving quality of life, modernising and transforming infrastructure and innovation and digital transformation.

The Vice President and Minister of Finance, Mr Ndaba Gaolathe has said the government has adopted strategies towards sustainable economic growth. He said several fiscal strategies have been adopted to reduce expenditure, and these include reducing spending and saving more, cutting public sector wages, and grants. ENDS