05 Feb 2026

Minister of Finance, Mr Ndaba Gaolathe, is set to present the 2026/27 Financial Year budget proposals against a backdrop of significant economic uncertainty.

This instability stems from a continued slump in the diamond market, compounded by geopolitical tensions and heightened volatility in international financial markets. Facing a constrained fiscal environment, the 2026/27 budget signals a strategic pivot, the introduction of the Botswana Economic Transformation Programme (BETP) and the implementation of National Development Plan (NDP) 12.

It also marks the second Appropriation Bill for the new administration, which has faced immense pressure to rescue the country from its current economic downturn and deliver on the promises of its 2024 election manifesto.

 For Minister Gaolathe, the status quo is no longer an option, the urgency to transition toward a private-sector-driven economy has reached a critical point.

 “The central reality for Botswana is that the economic model that carried us for decades, anchored heavily on diamonds and a strong, central role for the government, cannot carry us through the next decades in the same way,” Mr Gaolathe noted during a recent stakeholder engagement.

For decades, Botswana enjoyed robust foreign reserves, ample fiscal space and a prevailing confidence that government could both design and fund major reforms. Today, faced with dwindling buffers, government is leaning on the BETP as a practical mechanism to translate national priorities into tangible projects, investments and jobs.

According to the Ministry of Finance, the BETP aims to steer the country away from diamond dependency and cultivate sustainable, inclusive growth. The 2026/27 Budget Strategy Paper emphasises that this cannot be achieved by the state alone.

The BETP identifies six priority sectors as engines of growth which include tourism and agriculture, manufacturing, financial services and digitisation, energy and mining as well as infrastructure.

 These sectors are complemented by three social pillars, including healthcare, education and social protection. These areas were prioritised for their potential to drive exports, attract foreign investment and generate sustainable employment.

Government’s efforts to turn the tide come at a challenging time. According to the International Monetary Fund (IMF), the domestic economy contracted by 3.0 per cent in 2024.

While there was a modest recovery of 0.9 per cent during the first three quarters of 2025, overall negative growth is still expected as the diamond market continues its decline. ENDS