Botswana’s fiscal crossroads: Debt, development, recurrent expenditure :: Mmegi Online

The budget meeting of Parliament ended last Friday opened with the 2025/26 budget speech delivered by Finance Minister Ndaba Gaolathe in February presenting a stark reality: Botswana’s fiscal health is under strain, and tough decisions need to be made to ensure sustainable economic growth.

With a total budget of P97.61 billion, a swelling deficit of P24.7 billion, and total public debt now at P74 billion (25.75% of GDP), the country stands at a crossroads.

The lingering question in the minds of many is ‘how is the deficit going to be financed?’ Debt is one option. Debt, in itself, is not inherently bad—what matters is how it is used. If borrowed funds are directed toward productive investments such as infrastructure, energy, and industrial development, they can stimulate economic activity, create jobs, and enhance long-term growth. The challenge, however, is ensuring that borrowed resources are deployed in a manner that generates a return on investment.

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