The 2024-25 financial year incurred a deficit of P11.76 billion, preliminary data from the Bank of Botswana shows, a better performance than the initial forecast of P24.73 billion.
The central bank’s preliminary figures show that the budget was in deficit in three out of the four quarters of the financial year, sinking to a negative P6.2 billion in the second quarter and rising a surplus of P1.9 billion in the last three months. While the BoB data report does not give reasons behind the numbers, Finance Ministry officials have said the budget deficits are largely influenced by lower revenues from mining, particularly diamonds, which have been in a downturn since the third quarter of 2023.
The fluctuations in diamonds have intensified due to factors such as the Trump administration’s tariffs and diamond traders’ response to these, resulting in stronger quarterly swings in government revenues. The same factors have also made forecasts more difficult for the technocrats at the Finance Ministry, a fact worsened by the glitches experienced in the Government Accounting and Budgeting System for most of 2024. According to Finance Ministry officials, by early this year, officials were still battling to reconcile historical revenue and expenditure figures from previous financial periods, due to the troubles in GABS.
This financial year, the Ministry has adopted the long-awaited zero-based budgeting method which allocates funding based on programme efficiency and necessity rather than budget history. As opposed to traditional budgeting, no item is automatically included in the next budget, officials said.
