Vice-President and Finance Minister Ndaba Gaolathe has said the country needs to secure “a partner with deep pockets” to help achieve its national goals. He made these remarks during a discussion on the budget strategy paper in anticipation of the 2025/26 financial year budget speech, which will be the first under the newly elected Umbrella for Democratic Change (UDC) government following its decisive victory in last year’s elections.
According to Gaolathe, the preparation of the 2025/2026 budget is being shaped by a challenging financial and economic environment. Globally, Botswana faces an uncertain economic landscape, characterised by slowing growth and ongoing global challenges. Domestically, the government must drive economic recovery while laying the foundation for long-term resilience and sustainability.
The budget is expected to focus on several critical priorities, including rebuilding fiscal buffers to protect against future economic shocks, strengthening domestic revenue mobilisation to reduce dependence on external funding, advancing infrastructure modernisation to stimulate growth, and promoting innovation and private sector development to create jobs and diversify the economy.
To achieve these goals, Gaolathe stated that collaboration with all stakeholders, including potential partners, will be essential. He called for meaningful dialogue and the exchange of innovative ideas to establish a shared vision for a new Botswana.
“We need to step back as a country and decide for ourselves, who characterises the ideal partner for Botswana as a nation. Who is the right partner for the government, our state-owned enterprises, and the private sector?” he said.
Gaolatlhe emphasised that the ideal partner should be committed to Botswana’s narrative, proud of it, and dedicated to a long-term partnership.
“I am embarrassed to say this, but we need a partner with deep pockets,” Gaolathe admitted.
De Beers, a long-standing partner in Botswana’s diamond mining industry, is a key player in the country’s economy. The partnership between Botswana and De Beers began in 1969 with the creation of Debswana Diamond Company, a joint venture where both the Botswana government and De Beers hold equal ownership. Debswana has since become a major driver of the country’s economic transformation, generating significant revenue, providing jobs, and stimulating local development.
However, this partnership has faced challenges and controversies. Global diamond market volatility, including price fluctuations and increased competition from lab-grown diamonds, poses risks to both parties’ revenue streams.
With a projected budget deficit of P11.3 billion for the 2025/26 financial year, Gaolathe’s call for a partner with “deep pockets” highlights the fiscal strain the country is facing. Total revenues and grants are projected to reach P85.4 billion, while total expenditure and net lending are estimated at P96.7 billion.
The current financial year, which ends on March 31, is expected to show a shortfall of P18.6 billion—higher than the P16.4 billion deficit during the COVID-19-hit year of 2020-21.
While the domestic economy is expected to rebound in 2025, this macroeconomic outlook faces significant risks, including delays in clearing diamond industry inventories, El Niño-induced drought conditions, and inefficiencies at the Morupule B power station, all of which are straining key sectors. The slow progress of structural transformation efforts also adds to these challenges. Technocrats at the Ministry of Finance believe that the delayed implementation of critical fiscal reforms remains the greatest threat to the country’s economic growth in 2025.
Due to Botswana’s unfavorable fiscal position, Batane Matekane, Director of Macroeconomic Policy, noted that the implementation of budgetary consolidation measures will need to be intensified to rein in unsustainable budget deficits and rising public debt levels.
“If we do not implement fiscal consolidation reforms, we risk leaving a burden for future generations,” Matekane said.
These consolidation measures will include reducing expenditure, saving more, cutting the public sector wage bill and grants, and accelerating state-owned enterprise reforms. The introduction of the Public-Private Partnership Bill and improving the efficiency of public expenditure are key components of these measures. On the revenue side, efforts will focus on reducing dependence on mineral revenues, exploring alternative revenue sources, closing leakages, and simplifying tax laws to boost collections.
