Fiscal authorities brace for credit ratings’ decisions
Mbongeni Mguni | Friday September 11, 2026 14:01
The two ratings agencies conduct assessments on the country’s sovereign debt in March and September each year. The assessments earlier this year resulted in S&P’s lowering the country’s sovereign credit ratings, whilst Moody's downgraded the country last year. Botswana, however, remains in the investment category, being an outlier in Africa.
BusinessWeek has established that top Finance ministry officials met with S&P researchers at least three weeks ago, while a meeting with Moody’s was scheduled for last week.
The credit ratings agencies, who also met with the central bank and other key institutions, examine the direction of public finances, specifically existing balances, forecasts of spending and revenue, as well as plans to rein in the deficits that have plagued the budget since 2017–2018.
“The credit rating is essentially the agency’s opinion on how comfortably government can meet its debt repayments and what the general picture of public finances looks like at that moment and going into the future,” a ministry insider told BusinessWeek. “The agencies study the reports, meet with key officials, look at the numbers and the plans before making their assessments. “These assessments are directly linked to government’s cost of borrowing both domestically and in international markets.”
Government is applying brakes on its recurrent spending in an attempt to restore fiscal stability, with a range of belt-tightening measures which include restraining various allowances and revising social programmes to focus on deserving beneficiaries.
Latest estimates indicate that long-stricken government finances have warmed up thanks to improved diamond sales in the first half of the year and a P7.3 billion windfall from the Bank of Botswana.
Preliminary figures from the Bank of Botswana indicate that the final budget deficit for the 2025–2026 financial year came in at P16.3 billion, down from the forecast shortfall of P25.5 billion, largely due to a slowdown in spending.
“The overall picture is certainly an improvement from the lows we have seen in recent years,” the insider said. “However, the researchers look at the performance of the primary drivers of revenue, which continue to be minerals, specifically diamonds. “There has been some level of recovery there, but it continues to be fragile and fraught with threats, which may affect the ratings.”
Ahead of the engagements with Moody’s and S&P, the Finance Ministry also engaged experts from the United Nations Development Programme (UNDP) on sovereign credit ratings advisory.
In a statement in June, the ministry said the UN team was helping to strengthen Botswana’s capacity and readiness to engage effectively with international credit rating agencies. At the engagements with UNDP, Accountant General Tebogo Tomango acknowledged the prevailing economic challenges facing the country, which she said could potentially result in further downgrades if not adequately addressed.
The central bank also previously warned of the risk of a ratings downgrade in the next reviews.
Acting Director of Research and Financial Stability Department, Matlhodi Serero, told an economic briefing in June that there was a high risk of further downgrades if the measures that government agreed to implement with the agencies are not seen to have been done by the appointed time.
Analysts expect that in the engagements with the ratings agencies, the Finance ministry highlighted not only the spending restraint, but also the progress being made in implementing the Botswana Economic Transformation Programme (BETP).
The BETP is government’s main plan for structural economic transformation, including projects and policies, which is expected to produce diversified, new sources of revenue and broader growth for the economy.