Africa-Press – Botswana. Douglas Rasbash
Botswana’s 2026/27 Budget quietly crosses a threshold. With buffers depleted, a large unfinanced deficit, and debt rising faster than growth, borrowing is no longer funding transformation. It is buying time. This column argues that debt has become a substitute for sustainability and that time itself is now the country’s most expensive liability.
Botswana’s debt debate has entered a fundamentally new phase, and the 2026/27 Budget makes this unmistakably clear. The issue is no longer whether debt is rising, but why it is rising, how it is being financed, and what assumptions about the future are now embedded in fiscal policy.
THE GAP
The Budget projects a deficit of P26.35 billion, equivalent to 8.9 percent of GDP. Of the P22.3 billion required to finance this gap, P18.6 billion remained unfinanced at the time of presentation. This is not a technical footnote. It is a liquidity warning. The Budget itself concedes that failure to secure this financing will lead to arrears, rising debt service costs, and intensified pressure on the fiscus. By its own admission, Budget 26 is not sustainable.
BUFFERS GONE
Botswana’s traditional fiscal shock absorbers have been exhausted. The Government Investment Account, once the cornerstone of macroeconomic resilience, has fallen to P2.91 billion from P37.2 billion in 2014. With savings depleted, debt has become the primary stabiliser. Total public debt, including guarantees, now stands at P90.03 billion. Domestic debt has reached its policy ceiling of 20 percent of GDP, while overall debt is projected to rise from 33 percent of GDP to 44.7 percent by the end of the 2026/27 fiscal year.
SHIFTING MODEL
This trajectory requires lifting statutory debt limits, a step the Budget acknowledges carries credibility risks but judges less damaging than abrupt fiscal contraction. The implication is stark. Botswana has shifted from a low-debt, buffer-rich model to one in which debt substitutes for reserves. Borrowing is now financing stability rather than transformation, while execution risks such as cash flow pressures, arrears, refinancing, and rising interest costs move to the centre of fiscal management.
NOT UNIQUE
It is tempting to treat this as a narrow fiscal problem. That would be a mistake. Rising debt is not uniquely Botswanan. It is a global condition, and that context fundamentally changes how this Budget should be read. What matters is not only how much is being borrowed, but what kind of future that borrowing quietly assumes.
GLOBAL DEBT
Over the past six decades, total global debt has risen from just over 100 percent of world GDP in the 1960s to around 235 to 240 percent today, after briefly peaking near 260 percent during the COVID shock. The most striking feature of this history is not the spike itself, but the absence of any sustained reversal. Each major shock pushes debt higher. After each shock, debt settles on a higher plateau and resumes its climb.
DIMINISHING RETURNS
Global growth no longer reduces debt. It increasingly depends on it. Each decade now requires more borrowing to generate the same level of growth. Where post-war economies expanded with debt roughly equal to annual output, today the system requires more than twice global GDP in accumulated claims simply to maintain momentum. COVID did not create this condition. It exposed it. When growth stalled, the only stabiliser available was borrowing at scale. When the emergency passed, debt did not unwind meaningfully.
CLAIMS FUTURE
This is where debt stops being a technical variable and becomes a claim on the future. Governments can only repay through future production, future taxation, reduced consumption, or the conversion of natural resources into economic value. Debt therefore represents claims on future energy use, future resource extraction, and future ecological capacity.
PHYSICAL LIMITS
For much of the twentieth century, this posed few constraints. Energy was cheap, resource frontiers were expanding, and environmental costs were externalised. That assumption is now fragile. Climate adaptation costs are rising simply to preserve existing output. Energy transitions require higher upfront capital. Resource quality is declining. Yet financial claims continue to compound as if physical limits did not exist.
FALSE COMFORT
Despite widespread acknowledgement of climate risk, prosperity remains defined by consumption. Growth remains the organising principle. Debt remains the lubricant that keeps it moving. Sustainability, by contrast, implies restraint, efficiency, and different measures of success. It challenges the idea that every shortfall can be financed and every expectation met by future growth.
THE TEST
When accumulated claims exceed future capacity, societies rarely default outright. Adjustment instead occurs through inflation, austerity, financial repression, asset transfers, or ecological drawdown. Each reallocates costs differently. None are painless.
Seen through this lens, Botswana’s debt trajectory reflects more than fiscal slippage. It signals weakening growth engines, more frequent shocks, and the rising cost of maintaining stability. The real question is whether borrowing is preserving inherited structures or purchasing a transition.
TIME BOUGHT
The word sustainability appears repeatedly in the Budget speech. But sustainability is not declared by repetition. It is revealed by trajectory. A budget that exhausts buffers, carries a large unfinanced gap, raises debt rapidly, and lifts statutory ceilings is borrowing against a future assumed to be larger, richer, and more forgiving than the present. That assumption is precisely what sustainability is meant to question.
Debt can buy time. It cannot buy sustainability unless the time it buys is used to change the model itself. In Budget 26, that realignment is not yet visible.
