Kedikilwe sounds alarm as cost of living bites hard
Pini Bothoko | Monday March 9, 2026 09:45
Kedikilwe demonstrated an uncompromising picture of economic strain, warning that many families are now grappling with the most basic of necessities. He stated that food insecurity is rising, and for some households the question is no longer about comfort, but survival, whether there will be a meal on the table at the end of the day.
He asked the Minister of Finance, Ndaba Gaolathe, whether the government fully appreciates the gravity of the situation and what immediate and long-term interventions are in place to stabilise prices, address inflated essential commodities, and tackle unemployment in a contracting economy.
Responding in Parliament, Gaolathe made it clear that the government is acutely aware of the pressure facing citizens.
“We recognise that for some families this pressure is not theoretical. It affects whether there is food on the table at the end of the day. That reality weighs heavily on government and informs every policy decision we are taking,' he said. However, the Minister emphasised that the cost-of-living crisis must be understood within broader macroeconomic constraints. He revealed that Botswana’s domestic economy contracted by 2.8 percent in 2024, with growth projected at negative 0.4 percent in 2025 before a rebound to 3.1 percent in 2026.
According to Gaolathe, inflation stood at 3.9 % in December 2025 and edged up to 4.1 % in January 2026. He acknowledged that while inflation remains within the Bank of Botswana’s 3–6 % objective range, headline figures often mask the disproportionate burden borne by low-income households, especially in relation to food, fuel and other essentials.
He further cautioned that inflation is expected to rise temporarily in the first half of 2026 before moderating later in the year.
Against this backdrop, the government’s response, he said, is structured around three pillars: stabilisation, structural reform and employment-driven income growth.
Gaolathe stressed that stabilising the cost of living begins with protecting macroeconomic stability and safeguarding the value of the Pula.
Foreign exchange reserves stood at P47.4 billion in December 2025. Without corrective measures, projections indicated reserves could have been depleted by the first half of 2026. As a result, the government implemented exchange rate adjustments in July 2025 and January 2026 to stabilise external balances. “These interventions were necessary to protect the purchasing power of the Pula,” Gaolathe said, warning that failure to act would have triggered far more severe inflationary consequences for households.
On fiscal discipline, the Minister noted that for two consecutive financial years, no supplementary budgets were approved, a move aimed at containing expenditure.
He added that the centralisation of Government Purchase Orders reduced average monthly commitments by approximately 49 percent, curbing leakages and preserving fiscal space.
Furthermore, Gaolathe said procurement reforms are also underway to eliminate inflated public sector costs that often spill over into the broader economy. “Stabilising the cost of living begins with protecting the currency, restoring fiscal buffers and preventing macroeconomic instability from worsening household hardship,” he said.
While pursuing fiscal prudence, Gaolathe explained that the government is maintaining targeted social protection measures. For the 2026/27 financial year, he said P6.8 billion has been budgeted for social protection programmes.
Gaolathe highlighted that among the most notable measures is the increase in the Old Age Pension from P830 to P1,400, a significant boost aimed at strengthening household purchasing power.
'A new P300 monthly allowance for newborns has been introduced to assist families during early childcare, while free sanitary towels for students aim to ease essential household burdens,' he said.
Additionally, he said the government is also addressing food price pressures at their source by subsidising seeds and fertilisers for farmers.
'Electricity subsidies are being reformed for sustainability, but a 'social tariff' remains in place to shield poor and vulnerable households from steep energy costs,' he said
He added that public works programmes are being expanded and restructured through the Ikageng Programme, shifting from passive welfare to productivity-linked employment, particularly targeting youth and women.
The Finance Minister described these measures as deliberately targeted interventions that balance urgency with sustainability.
“We are protecting households today while ensuring that tomorrow’s stability is not compromised,” he said.
Beyond immediate relief, the government is confronting deeper structural vulnerabilities. He said between January and November 2025, Botswana recorded a cumulative trade deficit of P15.32 billion, reflecting heavy reliance on imported food and fuel.
'This import dependence exposes the country to external price shocks. To address this, the government is repositioning agriculture from subsistence production to export-oriented agro-industrial development. Under the Botswana Economic Transformation Programme (BETP), 26 high-impact agricultural projects are being rolled out across crop and livestock production, cold-chain logistics and market access,' he said.
He stated that these projects are intended to increase domestic production, reduce reliance on imports and stabilise food supply chains.
Gaolathe explained that a key reform will be the launch of the Botswana Mercantile Exchange in 2026/27, aimed at improving price discovery and reducing volatility for key commodities. By strengthening organised commodity markets, he said government hopes to improve transparency and protect both producers and consumers from extreme price swings.
'Energy reform is another critical area. Botswana continues to import a significant portion of its electricity. Accelerated renewable and base-load generation projects under the revised Integrated Resource Plan are expected to reduce import dependence and moderate long-term energy costs,' he said.
Gaolathe emphasised that reducing the cost structure of production in food, energy and logistics is the only sustainable way to moderate essential commodity prices without distorting markets or exhausting public finances.
While stabilisation and structural reform are crucial, the Minister stressed that unemployment remains the most significant driver of vulnerability.
“Cost-of-living pressures become crises when incomes are insufficient. The government’s long-term strategy, therefore, hinges on large-scale job creation through economic transformation. The Botswana Economic Transformation Programme has identified 186 projects across priority sectors, with the potential to unlock P514 billion in cumulative investment and create approximately 512,000 jobs by 2036,' he said.
He added that each project is performance-monitored and implementation-driven. She stated that several initiatives are already yielding results.
'The expansion of Khoemacau Mine is expected to employ up to 5,500 people at peak construction. In tourism, P362 million in new investments are projected to create over 500 jobs, while lease renewals have safeguarded more than 1,500 existing positions. Agricultural diversification is also showing promise, with fresh citrus exports increasing by over 390 percent between 2024 and 2025,' he said.
To support entrepreneurship and small businesses, Gaolathe said the government has allocated P1.31 billion in 2026/27 for MSME financing. A forthcoming National Fund of Funds is expected to expand access to patient capital and support scalable citizen enterprises.
'Education and Technical and Vocational Education and Training (TVET) reforms are being implemented to align skills development with labour market demand and reduce youth unemployment and NEET rates. Infrastructure investments in energy, water, transport and digital systems are also expected to stimulate employment multipliers across sectors,' he said.
Gaolathe underscored that job creation is not treated as a standalone programme, but is embedded across mining, agriculture, tourism, manufacturing, infrastructure and digitalisation.
“It is through sustained employment growth that households will ultimately defeat cost-of-living pressures,” he said.
In closing, the Finance Minister acknowledged the hardship facing Batswana but defended the government’s measured approach.
“We refuse to choose between compassion and discipline. We are pursuing both,” he said.
Through disciplined implementation of National Development Plan 12 and the Botswana Economic Transformation Programme, the government aims to lay the foundation for durable price stability, income growth and long-term resilience.
For Kedikilwe and many citizens watching closely, the true test will lie not in policy frameworks alone, but in whether these interventions translate into tangible relief for households struggling to keep food on the table.