According to the latest estimates, revenues in 2025–2026 amounted to P70 billion against spending of P86.3 billion. By comparison, the last projections from the Finance ministry, as made in the February budget speech, pointed to revenues of P71.2 billion and expenditure of P96.7 billion.The BoB’s preliminary numbers suggest that revenues came in P1.2 billion lower than forecast, whilst spending was P10.4 billion lower than approved and allocated. The central bank’s figures indicate that tax revenues, including mineral royalties and dividends, in the 2025–2026 financial year reached P68.2 billion, above the forecast of P61.1 billion made in February.According to the BoB figures, recurrent spending in 2025–2026 reached P70.1 billion, against the P74 billion forecast at the time of the February budget. Development budget spending, according to the central bank, was P16.2 billion, against the forecast P22.9 billion.The trend suggests that while the reduction in the forecast deficit was helped by lower recurrent spending, much of the difference came from non-spending of the development budget. Finance Minister Ndaba Gaolathe had expected a smaller cutback in development spending at the time of his February budget speech.“Development expenditure estimates have been revised downward by P903.32 million to P22.85 billion,” he said.Despite the improvements, the preliminary 2025–2026 budget deficit is amongst the strong shortfalls in recent years. The 2024-2025 budget carried a P19 billion deficit or 7.25% of GDP, while the year prior incurred a P11.1 billion shortfall or 4.25 percent of GDP.Government’s fiscal rule limits deficits to four percent of GDP, and whilst the limit is self-imposed, it is closely watched by credit ratings agencies, lenders and others.This year, the Finance Ministry expects a deficit of P26.4 billion or more than eight percent of GDP, although a stronger diamond recovery in the first half of the year and improved government finances could help the numbers.The BoB’s preliminary figures come as fiscal authorities apply the brakes on recurrent spending in an attempt to restore fiscal stability, with a range of belt-tightening measures such as restraining various allowances and revising social programmes to focus on deserving beneficiaries.The moves come as fiscal authorities fight to trim the budget deficit, in order to slow down the pace of government borrowing and avoid a debt free-fall which would push the economy into a crisis.The ministry’s permanent secretary, Tshokologo Kganetsano, recently told a parliamentary committee that government has saved approximately P3.3 billion thanks to efficiencies around overtime allowances, travel and the centralisation of Government Purchase Order (GPO) recurrent spending in the Finance ministry.“The centralisation of GPOs has significantly reduced spending commitments, with the number of GPOs declining from 231,369 in volume, which translates to P11 billion in value in 2024–2025, to 136,292 or P8 billion by February 2026, thereby delivering substantial P3 billion in cost savings,” Kganetsano told legislators. “Overtime expenditure, as at the end of March 2026, reduced from P781 million to P675.4 million, generating savings amounting to P105.8 million while travel expenditure declined sharply from P717 million to P466 million, yielding savings in the amount of P251 million.”Kganetsano said besides legislative updates to tax laws and plans for the introduction of VAT e-billing, the BURS had stepped up its debt and arrears recoveries, with P9.8 billion collected through the Intensified Revenue Collection Strategy.
