These are not ordinary times. Yet, history reminds us that this nation has navigated difficult waters before and did so by clinging firmly to the principles of prudence and macroeconomic stability. From independence in 1966, Botswana chose a path few resource-rich countries managed to sustain. Diamond revenues were not treated as windfalls for reckless expansion, but as capital to be managed with caution. The establishment of fiscal rules, conservative expenditure management, and the accumulation of buffers such as the Government Investment Account (GIA) were deliberate policy choices by government. While many mineral economies fell victim to boom-bust cycles, unsustainable debt and macroeconomic collapse, Botswana built credibility low debt levels, manageable inflation, stable exchange rate management, and investment-grade confidence. That reputation was not accidental. It was earned through restraint.
Today, the pressures are real. Diamond revenues have softened amid global market weakness. SACU receipts, though significant, are volatile and externally determined. Recurrent expenditure has grown structurally, reflecting legitimate development and social commitments. The result is a widening structural deficit and rising financing needs. Raising the debt ceiling may be legally and economically justifiable under current circumstances. Countercyclical borrowing, if responsibly managed, can cushion shocks and prevent abrupt fiscal contraction that would deepen economic pain. But expanding borrowing space must not become a substitute for structural reform. Debt is a bridge not a destination. The deeper task lies in restoring alignment between expenditure commitments and sustainable revenue streams. That means strengthening domestic revenue mobilisation, accelerating economic diversification beyond diamonds, improving efficiency in public spending, and rebuilding fiscal buffers once conditions stabilise. It also requires disciplined project selection to ensure borrowed funds translate into productivity-enhancing investments rather than consumption.
