NDP 12’s small missing piece
Mbongeni Mguni | Thursday January 29, 2026 12:22
On paper, the equation appears simple. Pension funds as at October 2025 held more than P166 billion in funds while government has, since 2017-18, been running multi-billion Pula budget deficits.
One side is looking at stable returns for members and another is looking at running the public service and delivering development. There’s a nexus between these two goals, particularly as the members of the pension funds are also the same citizens government serves.
The trouble is that freeing up these resources to drive the country’s developments, requires the establishment of complex arrangements, expertise and structures to safeguard pensioners’ funds, returns to members and the futures they invest in through their contributions.
According to the last figures provided by authorities, of the P108 billion in development funding spent in the country between 2012-13 and 2021-22, government funded 95 percent, with the balance coming from project-specific loans and donors.
Due to the slowdown in mineral revenues in the last decade and the tightening squeeze on diamonds in recent years, government’s ability to shoulder the responsibility for projects has weakened to the extent that the development budget for 2025-26 has been cut from the approved P23.8 billion to a forecast P13.9 billion.
The fact that much of the deficits since 2017-18 have been funded by running down the Government Investment Account and borrowing at increasingly higher interest rates from local and external financiers, means the inefficiencies that have traditionally haunted the development budget have become unbearable for government.
The National Development Plan 12 (NDP12) and the associated Botswana Economic Transformation Programme (BETP) approved last November, plan to spend hundreds of billions of Pula in the largest gamble on economic transformation the government has ever attempted since Independence.
Much of this funding is due to be sourced from the private sector and already, the Finance Minister has held roadshows and similar engagements with investors including commercial banks, the pension and insurance funds, asset managers and development finance institutions.
“The BETP is explicit that transformation is not the burden of government alone,” Vice President and Finance Minister, Ndaba Gaolathe, said in December. “It broadens the base of opportunity by diversifying sources of finance and risk, inviting private sector businesses, investors, and partners to co-invest in Botswana’s future. “That is the spirit of modern development.”
As warm as the reception has been for government’s initial feelers and as much as the private sector sees opportunity and wants to partner for development, a key piece of the puzzle is missing.
Investors wishing to take part in the NDP12 and BETP need the comfort or protection of legislation to underwrite their participation, specifically a Public Private Partnership Act.
Since 2000 when talk about bringing the private sector into public infrastructure development began in earnest in the country, the Finance Ministry has operated based on the PPP policy developed that same year.
The budget surpluses and healthy national savings of that era allowed government to take its time in analysing and initiating any PPP projects and even with the greater urgency of the post-pandemic period, less than five PPP projects have been completed since the policy was passed in 2000.
PPPs involve a contractual arrangement between a governmental institution and the private sector, where the private sector party provides public infrastructure and/or infrastructure-related services.
Typically, government’s contributions, over and above equity in the venture, may include subsidies, incentives, provision of service, the cost of providing the service, and others. The private sector can be asked to contribute up to 80% of the project’s funding.
Besides reducing government’s direct expenditure on public infrastructure, PPPs are expected to enhance the efficiency of both project development and operation, a challenge that has haunted nearly every major state-sponsored project over the decades.
Over the years, the Finance Ministry has maintained and updated a list of between 16 and 17 projects deemed ripe for the PPP and the most advanced of these have been stuck at “procurement of private partner” stage.
The BETP, however, promises lab-tested and costed projects whose returns have been analysed and which carry the implicit and explicit seal of government-backing due to their inclusion in the NDP.
Still, the absence of a specific PPP Act unnerves investors, as acknowledged by Finance Ministry technocrats last year.
“The PPP bill is one of the strategies that if we could pass the law and regulations, would give the private sector a safe space to play in,” Batane Walter Matekane, the ministry’s deputy secretary, Macroeconomic Policy, said last January. “We need life partners with deep pockets to play a role and we have to give you the comfort through passing this bill. “People want to see what is there and they want protection. “We will try and speed up the bill to be passed into law.”
In his State of the Nation Address last November, President Duma Boko stressed the importance of finalising the PPP legislation, noting its key role in unlocking private sector participation in the new NDP and BETP.
“Given the current fiscal constraints, the PPP model has become essential for delivering key infrastructure projects without overstretching government resources,” the President said. “In order to make it more responsive, the PPP Framework is being strengthened through the BETP, to make it more inclusive, transformative, and private sector-led. “Over the next 12 months, urgent milestones include tabling the PPP Bill, deploying PPP functions, resourcing the PPP Unit, and operationalising the appropriate governance structure. “These steps will ensure that PPPs deliver value, efficiency, and impact.”
Investors are reportedly waiting in the wings to carefully analyse the proposed PPP Bill, particularly the protections and recourse it provides. As its finances have weakened in recent years, government has been reluctant to issue blanket guarantees to any investor and it remains to be seen to what extent the planned PPP bill will provide comfort.
The Botswana Public Officers Pension Fund (BPOPF), the country’s largest pension fund, has said it is exploring opportunities to invest in local infrastructure. The Fund’s former CEO, Moemedi Malindah, however, has previously acknowledged the complexity of structuring such deals.
'It can be energy, water sector, we have issues around power and there’s a lot of infrastructure projects in that space, roads and others,” he told Mmegi previously. “The pipeline in infrastructure is endless and that’s why we don’t believe anyone can say there are no opportunities in Botswana. “They are there, but they take time to put together.”
All eyes are on the upcoming sitting of Parliament and whether the eagerly anticipated PPP bill will be tabled and approved by legislators.