IMF upbeat on Botswana growth prospects
Mbongeni Mguni | Monday April 27, 2026 06:00
The World Economic Outlook, published recently as part of the IMF’s Spring Meetings in Washington DC, indicates that the institution is optimistic about the country’s outlook, despite the recent contractionary trend in the economy.
IMF researchers expect that the economy will expand by 4.7 percent this year, the second strongest performance in the region after Zimbabwe’s projected five percent. By comparison, Zambia is expected to grow by 4.3 percent, Eswatini four percent, Namibia 2.4 percent, Lesotho 1.1 percent and South Africa one percent. Mozambique is expected to lag the region with forecast growth of 0.5 percent.
At that projected level, the IMF’s forecast for Botswana is also above the sub-Saharan average of 4.3 percent.
For 2028, the IMF sees Botswana’s growth moderating to 2.2 percent. For 2025, the IMF had projected a 0.9 percent contraction for Botswana. The country’s economy actually contracted by 0.7 percent, according to recent Finance ministry figures.
Whilst the IMF did not provide specifics on the optimism around the local economy, researchers hinted at Botswana’s track record of stability, sound institutions and a previously demonstrated commitment to reform.
“Several sub-Saharan African countries have demonstrated that deep and sustained reforms are achievable,” the IMF said. “Botswana’s long-standing success in leveraging diamond wealth, underpinned by transparent revenue management, rule of law, and a predictable policy environment, supported a sustained annual growth rate of about 12% between independence (1966) and 1990.”
Government has anchored both recovery and transformation in the short to medium term on the Botswana Economic Transformation Programme (BETP), which seeks to canvass funding of more than P500 billion for various economic initiatives. Advisers to the BETP also laid out the changes in policy and legislation, as well as decision-making processes and attitudes required to ensure the programme’s success.
IMF researchers noted that across Africa, State-Owned Entities (SOE) were a sector where reform is critically needed to support private sector-led growth going forward for the continent. In Botswana, SOE reform is seen as key to both fiscal stability and service delivery, although the private sector has called for a recommitment to privatisation to allow private capital and innovation into areas reserved for the SOEs.
“Reforming SOEs can also generate significant dividends,” the IMF researchers said. “Private firms consistently identify unreliable and costly electricity supply as one of the most binding constraints on their operations, with more than 70% experiencing power outages. “Therefore, SOEs reform is critical to lowering production costs, expanding and improving service delivery, and containing fiscal risks from contingent liabilities.”
Researchers said consistent with this, there was evidence that investors place greater weight on market access, which is tightly linked to infrastructure quality, a stable economic and political environment, and a skilled labour force than on tax incentives.