Africa-Press – Botswana. Government revenues have been severely constrained, hence the Ministry of Finance must be forthright that its fiscal position remained under significant pressure. Answering a question in Parliament on Wednesday, the Vice President who is also Minister of Finance, Mr Ndaba Gaolathe said the economy was at a crumbling stage since a sharp downturn in diamond sales, the government’s primary export and revenue source.
He said as a result, his ministry was experiencing delays in the processing of invoices, including payments to suppliers, hence those delays were not a reflection of unwillingness of a stark reality.
“We are operating in a constrained fiscal environment that demands urgent and disciplined financial management. In recent months, government has become heavily reliant on quarterly disbursements from the SACU Revenue Pool to keep the fiscal engine running.”
Mr Gaolathe said such dependency was deeply concerning, adding that it was neither stable nor sustainable, especially if government spending continued at its recent trajectory.
He said they were now confronting a widening mismatch between what the government earned and spent.
Given the prevailing circumstances, Mr Gaolathe said the government was now in a dire situation where it had to borrow to finance its daily operations.
He said to that end, government had acquired short-term loans from Bank of Botswana (P5.8 billion), BPOPF (P3 billion) and further the government had secured loans from OPEC (P2.67 billion) and AfDB (P4.06 billion), adding that was both undesirable and unsustainable.
“Ideally, Government borrowing should be used to fund mega and impactful infrastructure projects that contributed to economic growth and job creation,” explained Mr Gaolathe.
He also said despite securing those loans, government could not keep up with all its obligations, which included public debt. The Ministry of Finance, he continued, had therefore initially embarked on a raft of short to long-term measures such as the stopping generation of GPOs with effect from July 14, 2025 and broadening of revenue base through online transactions.
He said in the medium to long-term, Botswana Economic Transformation Programme would be on board for the much-needed turnaround.
Furthermore, Mr Gaolathe said there had been institutional lapses due to outdated systems and processes adding that the ministry was now upgrading and modernising to more competently forecast cash flows.
He was responding to a question from Tati/East MP, Mr Tlhabologo Furniture who had asked the minister when the service providers owed by the government for the past six years would be paid.
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