A year of balancing economic truth-telling and panic
Mbongeni Mguni | Monday December 22, 2025 06:00
Fear and panic are what have triggered nearly all the economic crises seen all over the world in the past centuries. This is precisely why leaders, particularly those in charge of public finances, make great efforts to manage the narrative and optics around the economy, in order to manage fear and quell panic. Even if there is good reason to be concerned, nothing is to be gained from panic, except pandemonium and chaos. When dark clouds hang over the economy, the wrong statements, incorrect optics and even poor reporting by journalists can trigger investor panic, capital flight, bank runs and massive job losses.
The Northern Rock Bank Run of 2007 in the United Kingdom is cited as a classic example. Critics say when Northern Rock Bank faced liquidity challenges and had to ask for help from the Bank of England, media reported this as a bank failure, mistaking illiquidity for insolvency and failing to clarify that depositors’ funds were, in fact, secure.
Panic ensued and customers stormed the bank demanding their deposits, technically known as a bank run, which was the first in the UK in more than 150 years, heralding the country’s slide into the global financial crisis of that year. This year, there was plenty of reason for fear and panic. New Finance Minister, Ndaba Gaolathe, himself alluded to the depth of the ditch three days after he took up the portfolio last November. “What I can say is that the situation is bad, worse than what we had thought,” he told journalists.
However, as leaders do, Gaolathe also quickly moved to assuage fears. “The situation is worse than we thought, but we have the people, the leadership, the civil servants who have everything that is required to get us to the new Botswana that we have been talking about”. The numbers started coming in. The challenge continued between reporting accurately and not triggering panic. Early in December 2024, the Budget Strategy Paper forecast a deficit of P18.7 billion for the 2024-25 financial year, a figure subsequently raised to P24.7 billion by the time the budget speech was read in February. All these figures were wildly beyond the original forecast of P8.7 billion, a figure that many at the time criticised as far too conservative given the steep diamond downturn.
The budget deficit projections may seem like issues that government bean-counters have to concern themselves about and that perhaps for the ordinary person, should only matter if public services or projects are affected by cost-cutting.
However, as many found out, there was plenty of reason to perhaps fear and panic over the upward revisions in the deficit. Combined with another P22.12 billion deficit forecast for 2025-26, government’s need for debt escalated, drawing more funds out of the capital market, which in turn worsened the financial sector’s liquidity crunch, resulting in higher costs of funding for banks.
To cover their now more costlier deposit rates, banks raised their lending rates, uncoupling officially from the Bank of Botswana’s benchmark rate for the first time since the independence to do so was introduced in 2023.
A wave of lending interest rate increases took place across the banking sector from May, stopped only by an order to pause from the central bank, but by then, commercial banks’ average prime rates were 7.19 percent compared to the BoB’s benchmark of 3.50 percent.
Even in the midst of this, those tracking the numbers had to thread the needle carefully between spouting out numbers in isolation that could cause panic and instead, carefully explaining the context of the situation, the plans being announced and the solutions on the table.
Between January and Press time on Thursday, journalists on Mmegi’s Features Desk had produced no less than 70 long-form features on various aspects of the challenges facing the economy, the lessons, the possible solutions and the outlook, all seeded with expert commentary and analyses.
Headlines during the year included:
Gaolathe to Gaolathe: Budgeting through a crisis (07 Feb 2025)
The true cost of govt’s ‘free lunch’ (14 Mar 2025)
‘Government is broke’ narrative backfires (21 Mar 2025)
Budget crisis: The stress of not worrying (16 May 2025)
Analysis paralysis and the approaching fiscal storm (23 May 2025)
A P24bn budget miscalculation (23 May 2025)
Who failed Botswana - The technocrats or the system? (20 Jun 2025)
Glimmers of hope in mining’s doom and gloom (20 Jun 2025)
BETP: Gamechanger or new wine in old skins? (25 Jul 2025)
Five reasons to be hopeful about the economy (23 Oct 2025)
A P388bn bet on transformation (23 Oct 2025)
The Sanballats and Tobiahs of economic rebuilding (05 Dec 2025)
In the hundreds of thousands of words used over the year to carefully track the economy in its various manifestations, the emphasis was always on avoiding a Northern Rock Bank fiasco. Some may view it as watering down the truth or pandering to the powers. However, financial reportage, particularly when it is developed for long-form/features, is never “gotcha journalism”. The stakes are simply too high and the price for errors too costly. It is a nuanced brand of journalism tackled by calm heads, supported always by data and written in the broad interest of national economic development through providing a platform for enlightenment, disclosure and debate of often-times complex trends and issues.
It also holds a mirror up to policymakers and leaders to say, ‘this is what you said about this issue, and this is what we are seeing or what the numbers are saying’. It can be uncomfortable, and it often does not resonate with what corporates and sovereigns would want as their narrative. But done responsibly, it is critically necessary for the transparency, accountability and national buy-in required in economic development.