03 Sep 2025

Following governments efforts to introduce discipline in the conduct of fiscal policy, signs are  emerging indicating positive shift toward economic stability and growth.

Officially opening the investor roadshow session, Vice President, Ndaba Gaolathe indicated that preliminary data showed that spending levels in the 2024/2025 financial year was lower when compared to the 2023/2024 financial year, demonstrating government’s deliberate efforts towards expenditure restraint despite unavoidable obligations. 

Mr Gaolathe, who is also Minister of Finance said the first round of cost-containment measures, which included the centralisation of government purchase orders had revealed a widespread systematic gross mismanagement of control measures across ministries, departments and agencies. 

“Additional fiscal reforms such as payroll audit, wage bill management, government fleet management and the process of repairing and restoring discipline in the process of supplementary budgets are currently underway. We will unpack these efforts in the upcoming mid-term budget review statement,” he said.

 Mr Gaolathe stated that broadening the tax base was also a priority, hence the strategic decision to amend the Value Added Tax Act specifically to introduce taxation of remote services and to mandate electronic invoicing to enhance collection of value added tax. 

“We intend to modernise our laws and regulations so that investment flows swiftly, opportunities open widely and innovation thrives,” Mr Gaolathe said.  

Therefore, he said  government intended to bring to Parliament in November, pieces of legislation including the comprehensive review of the Income Tax Act and the Value Added Tax Act as well as development of the new Tax Administration Act. 

Further, Mr Gaolathe stated that government had also started a process of transforming State owned Enterprises (SoEs) into sustainable engines of wealth creation across all sectors including the meat industry, rail and air, regulatory, banking and postal services. 

 

In an effort to mitigate the rapid decline of the country’s foreign exchange reserves, he noted that government took bold and unpopular decisions during the mid-term review of the exchange rate framework in July 2025. 

This, he said included revising the current annual downward crawl from 1.51 percent to 2.76 percent, widening the trading margins from plus-minus 0.5 per cent to plus-minus 7.5 per cent, for the remainder of the year and maintaining the Pula basket of weights as 50 per cent for the South African rand and 50 per cent to the special drawing rights. 

He also said that economic diversification was part of economic recovery, citing the newly launched Botswana Economic Transformation Programme (BETP), which was designed to address structural economic constraints, reduce over-reliance on diamonds and foster a diversified, export-led economy that creates quality employment for Batswana. 

Mr Gaolathe thus reaffirmed government commitment to implement reforms that would enhance liquidity in the secondary market, strengthen price discovery, diversify instruments available to investors as well as broaden participation, particularly among retail investors. ENDS