Smart subsidies and uncomfortable questions
Lewanika Timothy | Wednesday June 24, 2026 10:24
President Duma Boko recently threw down the gauntlet, challenging the nation to focus on solutions, rather than brilliantly describing problems. Here goes!
Earlier this week, the Minister of Local Government and Traditional Affairs, Ketlhalefile Motshegwa, confirmed that payouts of P300 per month under the child grant support scheme are scheduled to kick off.
According to the Ministry, the criteria for accessing the grant is very simple. The child must be under 12 months old, be a Motswana and the primary caregiver must have lived in the district of application for at least six months.
The support is designed as a “universal grant” meaning it is applied regardless of the income levels of those applying. Already, the Ministry has embarked on an aggressive registration campaign, calling for qualifying applicants to come forward.
The child grants continue a pattern of blanket subsidies that have been slammed by institutions such as the World Bank, International Monetary Fund and most persistently by the Bank of Botswana.
Apart from subsidies, estimates of Expenditure for the 2026-2027 financial year show a P6.5 billion allocation under National Development Plan 12 for the country’s various social welfare programmes. In fact, for the 2025–2026 financial year, government more than doubled its social welfare programme spend from P2.88 billion to P6.48 billion.
Figures contained in the draft Estimates of Expenditure show that government will continue this trend of ballooning social welfare support in the form of “community projects” and reformations to the “Ipelegeng programme”.
The welfarism is not limited to funds explicitly labelled as welfare. A closer look at the way government is run also reveals a benign welfarism approach to running government.
For example, government sees its public sector human resource more as a way to keep Botswana working, than enhancing efficiencies in service delivery, refusing to lay off some in other sectors or reduce wages while pursuing further “insourcing” of a bloated workforce.
With government facing a deficit wider than the P26.4 billion originally forecast in February, and with public debt levels and costs climbing, the urgency of finetuning the country’s subsidies has become an emergency.
In a country with one of the world’s highest rates of inequality, where the richest one percent of people earn more than 20 times the average income of the rest of Batswana, the continuation of blanket subsidies not only weighs on public funds, but also means less support for those who need it more.
The central bank has over the years submitted several lengthy research reports and recommendations to government on the urgency of streamlining subsidies. Former governor, Moses Pelaelo, spoke passionately on the matter in responses to Mmegi a few years ago.
“The government has a social register and we have also advocated for a digital or biometric Omang where we can load everyone’s profile and say this person is an orphan, or this person is earning less than P5,000 and when they go to Marina (Hospital), they are the ones that can be allowed to come in without paying. “But there are those of you who are seeing private doctors every week, month, and paying P270 consultation fee and you also pay P100, 000 for being hospitalised in a week at a private hospital. “In Marina, that number is P60 a day, I think. “We need cost recovery of some kind to deal with this question of fiscal consolidation,” Pelaelo said in August 2023.
Across health, education, electricity, water and now child grants, blanket subsidies mean those who can afford, technically have the same right of access as those who cannot and who desperately need the sustainability of this support.
Former BoB deputy governor and now Finance Ministry permanent secretary, Tshokologo Kganetsano, expressed the same sentiments during his time at the central bank.
“There’s a case for the gradual removal of some subsidies that constitute a large proportion of government budget and reallocate resources to infrastructure,” he said. “If you go to rural areas, because we know that government provides a lot of things for free and even people get paid for that, some will take a tractor to go and draw a few lines, then go and register to say they have ploughed two hectares and get paid by government. “That’s a leakage and the subsidy is benefitting people who are not prepared to do serious farming.”
There is certainly a consensus that social welfare is meant to protect the downtrodden members of society, who earn below the minimum wage and live below the poverty datum line. The bone of contention is on the application of blanket subsidies that stretch government budgets by allowing even the country’s top earners to benefit from programmes intended to provide support to the downtrodden.
Last year the Finance Ministry increased old age pensions to P1,400. While it was commendable, government fell into the trap of continuing to extend this welfare as a blanket subsidy even to pensioners enjoying monthly annuities of thousands of pulas.
The old age pension, known as Tandabala, is provided to any citizen over 65, a group that includes multimillionaire businesspeople and other wealthy individuals, for whom the P1,400 simply piles up every month unnoticed by the other healthy figures in the bank balance.
The opportunity cost is the number of poor elderly people who could have been assisted and uplifted if the right metrics were used.
In its 2011 Botswana Risk Assessment Report, the International Monetary Fund cautioned that the country’s decades old approach to providing social services posed a risk of skewed expectations that government may not be able to keep up with.
“The government’s long-standing success in providing for the basic needs of citizens may prove a double-edged sword. “The breadth of state programmes has created heightened expectations and demands will be compounded as the population grows,” the researchers shared.
To some extent, some work is being done within government to sharpen the focus of blanket subsidies. The Ministry of Labour and Home Affairs is pioneering the “Digital Omang,” which is a key step to achieving the social registry based on the biometric Omang that the central bank has been advocating for.
Such a system would run across civil registry, the Botswana Unified Revenue Service, commercial banks, Deeds Registry and even the telecommunication services providers, to enable the continuous capturing of data for the purposes of estimating incomes.
The nexus of civil registry, technology and incomes is already in operation in several African countries. For example, Kenya’s Maisha card combines civil registry and tax agency Personal Identification Numbers to provide “a clearer view of income generation and compliance”.
Some members of Parliament have also called for a tightening of the subsidies and welfare programmes, in order to better target beneficiaries and improve the real-world return to the nation.
“Most of the time we have been told that Tandabala is given to everyone because doing a means test is costly,” said Leader of the Opposition, Dumelang Saleshando, when responding to the budget speech in February. “The situation where you find a retired chief executive of a multinational company, a retired president, earning retirement pension plus Old Age pension of P1, 400, should stop.”
Across the aisle, Environment and Tourism minister, Wynter Mmolotsi, agreed and pledged that government would conduct a comprehensive assessment.
“Currently, if you look at the situation there are people who are paid pension by the government and they go on to benefit from the Tandabala as well. “This is what we call double dipping. “So the assessments we are going to do will guide us as we try to accommodate people aged 60 and above. “As we remove undeserving people who are double dipping, we will create an opening for 60 years plus,” Mmolotsi said.
The trends are moving in the right direction, but as with all government actions, the pace of reform is running far slower than public funds can bear.