10 Feb 2026

Since the mid-year budget review, updated information indicates that the fiscal position for the 2025/2026 financial year is broadly expected to remain unchanged with a deficit estimated at over P25 billion.

Presenting the 2026/2027 budget speech in Parliament on Monday, Minister of Finance, Mr Ndaba Gaolathe said total revenues and grants had been revised downward to P71.22 billion from the P75.49 billion in the original budget.

“This revision primarily reflects a decline in mineral revenue which has decreased from P15.75 billion to P12.06 billion. SACU revenue has been revised upwards by P631.1 million from P24.36 billion in the original budget to P24.99 billion while VAT revenue has increased by P1.62 billion from P12.10 billion to P13.71 billion,” he said.

Mr Gaolathe said non-mineral income tax had been revised downward by P2.69 billion from P19.01 billion in the original budget to P16.32 billion.

He said profits from Bank of Botswana, if any, would be communicated at the appropriate time and would provide an important additional revenue stream, helping ease fiscal pressures and narrow the fiscal deficit.

Mr Gaolathe said total expenditure and net lending had been revised downward to P96.70 billion from the original budget of P97.61 billion.

“Of this amount, recurrent expenditure estimates are maintained at their original budget levels while development expenditure estimates have been revised downward by P903.32 million to P22.85 billion,” he added.

He said total revenues and grants for the financial year 2026/2027 were projected at P77.22 billion and that SACU receipts were expected to remain the largest revenue source at P26.79 billion followed by non-mineral income tax which was forecast at P19.76 billion.

Mr Gaolathe said VAT collections were expected to be the third largest contributor at P15.10 billion. He added that mineral revenue was projected to broadly remain the same at P12.21 billion while the remaining P3.36 billion was expected to come from other revenues and grants.

Minister Gaolathe said total expenditure and net lending for 2026/2027 was projected at P103.58 billion.

He said of this amount, total recurrent expenditure was expected to reach P80.32 billion, reflecting government’s ongoing commitment to operations and service delivery, adding that the development expenditure was estimated at P23.38 billion while net lending was minus P121.92 million.

Mr Gaolathe said total statutory expenditure for 2026/27 was estimated at P27.26 billion, representing a 20 per cent increase from the revised allocation of P22.70 billion in the 2025/26 financial year.

He said the provision covered government statutory obligations including debt financing, pension contribution for civil servants and other statutory commitments.

“The allocation towards pensions, gratuities and compensations is primarily driven by the recalculated transfer value of P5 billion for members of the Botswana Defence Force (BDF), an amount of P673.60 million required to rectify transactions related to government’s capital injection into DeBeers, an obligation initially settled directly through Bank of Botswana in 2019 as well as anticipated pension contribution arrears of P5 million for C band employees arising from a Court of Appeal judgement on multiple grading of the positions,” he said. BOPA