The new government is prioritising fiscal discipline amid weakening mineral revenue and significant cost overruns such as the Kanye Sanitation Project.
In its annual spending plan or national budget presented on Monday 10th February, the finance minister and vice president, Ndaba Gaolathe – who is generally considered to be a ‘Mr. Clean’ and held in high regard in the economic circles – set total government expenditure for 2025 at P97 billion, a 4.9 percent decrease from 2024. The budget emphasises financial discipline, streamlined investment processes, and reforms in state-owned enterprises.
The focus is on execution, accountability, and building a sustainable future through strategic partnerships and mega-projects, said Naledi Madala, the Senior Policy Advisor at the Ministry of Finance, during the FNBB Budget Review Seminar. She outlined the new administration’s vision as presented in the recent budget speech.
Addressing Structural Challenges
A key priority for the government is addressing systemic dysfunctionality within government operations. Cost overruns and poor planning have historically led to ministries frequently requesting supplementary budgets after allocations are made. The Kanye Sanitation Project, for instance, has exceeded its initial budget of P724 million, with cost overruns now surpassing P3.6 billion, according to Finance Minister Gaolathe.
Madala pointed out that this practice signals a lack of proper planning and budgeting, which the new government intends to correct. “The principle of supplementary budgets should be reserved for truly unforeseen circumstances, like COVID-19-type emergencies,” she explained. To improve financial discipline, the Ministry of Finance is urging accountability from both government entities and the public.
Additionally, the government is tackling inefficiencies in the payment process. Many suppliers have reported non-payment for services, an issue Madala attributed to engagements being made without proper budgeting. She said efforts are being made to streamline financial commitments to ensure timely payments.
“In an ideal situation, planning and budgeting, if done correctly, should be able to take any ministry throughout the whole year without them coming back to us for supplementary budgeting,” she said.
Private Sector and Economic Expansion
Madala underscored the government’s commitment to creating an environment conducive to private sector growth. The administration is prioritising the establishment of mega-companies, akin to Debswana, that can compete on a global scale. However, she acknowledged that Botswana has lost some of its ability to negotiate and develop such enterprises over the years.
To reverse this trend, the government is focusing on stabilising the economy and laying the groundwork for significant investment promotion. “It is very clear in the budget that this government is intentional about facilitating international investment in mega and transformational projects,” Madala noted. This requires restructuring the current fragmented investment engagement model, where multiple agencies interact with investors, often leading to confusion and inefficiency.
Madala proposed a streamlined approach similar to banking relationship management, where a single entity takes ownership of the investor’s journey from start to finish. She stressed the importance of restructuring the system immediately to enhance investment facilitation.
“I cannot help but really think about what needs to happen in the sense of a very simple model that we use in banking where client X is allocated a relationship manager, and this relationship manager is responsible from A to Z of this client’s banking needs,” she said, adding that “as the relationship manager, you are the one who owns this relationship, and you are the one who makes sure that this client is well taken care of.”
Madala explained that Botswana currently operates a fragmented model where investors are led by multiple agencies, including the BITC, SPEDU, SEZA, BTO, BDIH, the Presidential Investment Coordinator, and the Ministry of Finance.
“By the time the investor leaves this country, they are totally confused in terms of who is the point of contact, how this relationship or this conversation moves from A to the next level because they will have engaged with almost everybody, and no contact has been able to own that relationship,” she said.
“I think this is something that, realising how investments are going to be very key for this government, we need to immediately restructure,” she added.
Partnerships and State-Owned Enterprises Reform
The Vice President has emphasised the importance of identifying ideal government partners, and work is already underway to develop a compliance framework. The government seeks long-term investors with patient capital rather than those focused on quick profits. Concerns over past issues, such as money laundering, have prompted a cautious yet strategic approach to partnership selection.
“We just want to make sure that we are getting partners with patient capital, partners who are in it for a long period, and they are not looking to make quick capital,” Madala said.
Rationalisation of state-owned enterprises (SOEs) is also a focal point. “There’s a lot of fodder on the table that will allow us to make decisions and move forward,” Madala stated. While previous administrations often engaged in prolonged studies without tangible action, the current government is determined to implement changes swiftly. The Botswana Vaccine Institute (BVI), for instance, is identified as an SOE with potential to become a global player, and Madala said work is already underway to optimise its growth.
Enhancing Execution and Public Engagement
Execution has historically been a weak point, and the government is actively identifying factors hindering policy implementation. The administration recognises the importance of public engagement and is committed to integrating ideas from Batswana.
“We are going to continue to listen and integrate ideas. What we have realised is that Batswana are very clear about what needs to happen to this economy,” Madala concluded.
“We understand that it doesn’t matter how brilliant or transformational the ideas that we are going to come up with are if we continue to operate in an environment that we have adopted,” Madala said.
“We tried to allow ourselves to think broadly about issues,” she stated, emphasising the government’s shift from merely focusing on budget allocations and fiscal strategy to developing a comprehensive economic plan.
“We didn’t want to allow ourselves to be discouraged by the low projections,” Madala said, as the economy is expected to grow by 3-4 percent in the next two years. “We wanted to allow ourselves to adopt a strategy of outperformance, which is going to allow us to actually exceed the kind of projections that we are putting forward.”
Recognising the need for inclusivity and economic depth, the administration has introduced measures aimed at long-term prosperity.
