Vice President Ndaba Gaolathe told the recent Budget Pitso for general stakeholders that the next budget, which is expected to be delivered next month, will focus on rebuilding the strength of the country’s financial buffers. “The 2025/2026 budget will prioritise several critical areas, including the need to rebuild fiscal buffers to protect against future economic shocks, strengthen domestic revenue mobilisation to lessen reliance on external funding,” he said. Financial buffers are often government funds saved and kept in offshore accounts as rainy days insurance for government. They are usually part of government's share of the Government Investment Account (GIA) or in the case of other countries’ sovereign wealth accounts.
The GIA, which is managed by the Bank of Botswana and represents government’s share of the Pula Fund, is an asset generally unknown by most outside the finance and banking sector. It sank further to P1.25 billion in September 2024, compared to a figure of P12.5 billion in September 2023. Government often dips into the GIA to fund various needs such as the 2016 Economic Stimulus Plan and budget shortfalls. Frequent withdrawals from the Pula Fund are also made to support the country’s import bill. Gaolathe and his technocrats are hammering out a tough 2025-26 budget, which is expected to carry a P11.4 billion deficit. The current financial year, which ends on March 31, is expected to show a shortfall of P18.6 billion, higher than even the COVID-19-hit year of 2020-21, which produced a P16.4 billion deficit.
