18 May 2026

Introduction A story is told of a UB First-year Economics student who tried unsuccessfully to explain to his mother the course he was doing. Exasperated, one day he retorted: ‘Ke dira course ya ga Mogae’ (I am doing Mogae’s course’). 

The mother’s answer was calm: ‘Nnyaa ha ele ya ga Mogae go ra’a gore e siame’ (Well, if you are doing ‘Mogae’s course’, then it must be a good choice). That is how highly regarded Festus Mogae was by ordinary people – his esteem ended would-be-a family feud. 

Mogae studied Economics at Oxford and Sussex UK Universities, respectively. The latter in Development Economics, combining Political Philosophy and Economics, which set him up as an all-rounder in his sequent life. 

His career spanned the Ministry of Finance and Development Planning as the first cohort of Economics graduates from abroad; thereafter, a Directorship role at the International Monetary Fund, followed by appointment as the first local Governor of the Bank of Botswana, replacing a renowned Quill Hermans. Progress took him to a PSP position, before being courted as Finance Minister and VP under President Masire and eventually succeeding him, a feat brokered by his friend, Louis Nchindo.

 In this piece we chronicle the late Former President’s most prominent (and controversial) economic policy decisions in that illustrious journey. 

Though not exhaustive, we bring attention to some significant decisions that set him apart as an Economic policy maker faced with tough choices. In the review we examine each major policy decision critically, bringing out the Economist in him. 

The NDB loans saga 

Soon after assuming the reigns at Finance, Mogae was made infamous but popular by the NDB saga. He bluntly refused to endorse the writing-off of NDB loans to prominent farmers who used NDB to buy farming equipment. 

Prior to his entry, a legend had been set whereby the development bank would religiously write-off unperforming loans based on recurring droughts.

 In the list of loan defaulters were prominent politicians, such as Ronald Sebego and President Masire himself! It was a political embarrassment to the ruling BDP. 

Perhaps riding on his Oxford economics, he argued that drought is a business risk like any other and farmers have to absorb it as entrepreneurs in other sectors did. The political backlash was huge - the BDP was facing ‘friendly fire’. 

University students marched in support, while his detractors inside the BDP and government grew. But Mogae stood by principle, ordering that every defaulting borrower should ‘pay-up or face seizure of assets’. They did. 

This philosophy helped the state-owned bank to disabuse itself of political interference and would later, anchor many state-owned lending schemes such as CEDA, CEMAEF, BSB, ARAP and FAP and set the scene for the abolition of the PDSF, through which the elite legally siphoned-off public funds through loss-making SoEs. On the other hand, the rigid practice of NDB’s lending policy would relegate Borolong farmers, who had earned reputation as grain producers. 

The economics of HIV and ARVs 

Perhaps the most well-known of Mogae’s policy decisions was his passionate fight against HIV and state-funded Anti-Retroviral Drugs (ARVs) freely provided. At the time he was President. He ensured that Joy Pumaphi, the Minister of Health, had the same energy. 

He set up the National Aids Coordinating Agency (NACA) under the Office of the President and caused the Ministry of Finance to fund ARVs from the fiscus without a direct user levy. 

The economics lay in the concept of saving skilled labour from the ravages of the disease by viewing labour as an asset whose value had to be retained through maintenance costs. Expenditure on ARVs was classified by the Ministry of Finance as capital expenditure under the Development Budget. 

Over time this saved many lives and legitimized state funding. However, over time, it became a largesse at the Central Medical Stores (CMS) by which big pharmaceuticals and retail pharmacies became beholden to incessant huge fiscal allocations. Mogae’s view on HIV and ARVs set him apart from his peers, such as South Africa’s Thabo Mbeki, who refused state funding of ARVs. 

Food security and food sufficiency 

While he was Finance Minister, Mogae was confronted with a major policy shift at the Ministry of Agriculture.

 The Ministry was toying with abandoning food self-sufficiency and self-reliance which, hitherto, were the cornerstone policy objectives. Instead, the ministry was now singing lyrical about a new paradigm of “Food security”, premised on a notion derived from David Ricardo’s theory of comparative trade.

The idea was simply that there is nothing wrong with food imports dependency if it is affordable and backed by lower comparative costs generated from diamond surplus and an appreciating Pula-Rand exchange rate; pursuing food self-sufficiency was akin to autarky and anti- trade integration. 

Mogae supported the policy shift. Since then, the ministry never fully reversed the policy, hence the high food import bill and the recent aggressive tone by South Africa farmers following the vegetable ban by SA’s satellite economies. 

Devaluing the Pula 

Another controversy came in 2005, when Baledzi Gaolathe was Finance Minister, through the devaluation of the Pula and adoption of a new exchange rate system – the crawling peg system. 

To install the new system a large devaluation was necessary to avoid a rigid but overvalued currency which had appreciated cumulatively on the backdrop of high diamond exports. An overvalued currency was hurting other sectors such as agriculture and manufacturing, it was argued. 

The decision was politically controversial and unpopular. However, Mogae’s administration pushed it through, bravely. Eventually it became entrenched policy and rarely attracts much resistance whenever the crawl rate is adjusted to weaken the Pula’s value. 

Privatisation Policy 

In 2000, Botswana adopted a Privatisation policy and subsequently a Privatisation Master Plan, with a roadmap to hive-off state-owned enterprises to the private sector. 

Again, the combination of Gaolathe-Mogae bravely advocated for it, despite minimal resistance from the trade unions. Joshua Galeforolwe led the crusade as PEEPA head, supported by Elias Dewah at the then BOCCIM. The political opposition posed little resistance following the BNF split of 1998. 

Despite wide consultation and broad acceptance, implementation was blogged by the bureaucratic empires in the public sector, keen to hold on to their turf. 

Eventually only the Botswana Telecommunications Corporation (BTC) was successfully privatised with government holding a majority stake. 

It seemed Festonomics was not wired to push a fastened bureaucracy. 

The 2004 Mine Workers Strike 

Then came the 2004 Mine Workers Strike over pay and bonuses following a bumper harvest profit.

On the other side was Mogae’s friend, Louis Nchindo up against a militant Mine Workers Union led by rising youthful union leaders in Jwaneng and Orapa. 

Mogae tried to broker peace by calling parties to his office: unbeknownst while the union honored the call, the mining company, Debswana’s lawyer, Parks Tafa, was at the labour court to interdict the strike. Out of over 3,000 striking workers, 461 were dismissed en masse for participating in the strike. 

Mogae shifted from a peacemaker to condemning the union’s lack of patriotism, much similar to Seretse’s condemnation of the same miners back in the 1975 strike. Thus, Mogae’s relationship with Unions remained uneasy and distrustful.

 Diversification and FDI: Mogae’s relationship with investors 

Mogae’s economic policy struggled but failed to conquer the difficult terrain of economic diversification. 

Despite rhetoric and grand speeches about a shift from diamond dependency, it was apparent that it encountered stiff challenges. Soon after ascending to the throne of President, Mogae came head-on with the biggest threat to Botswana’s fledgling manufacturing sector – the closure of Hyundai’s Semi-Knocked Down (SKD) car manufacturing plant at Gaborone Block 3. 

Hyundai Motor Distributors met massive, organised resistance from SA’s car manufacturers, labour and government, keen to see the collapse or relocation of the plant. Four hundred workers lost their jobs. 

Again, it seemed Festonomics could not stem the tide, partly due to adherence to traditional economic policy thinking, which cowed in the face of trade wars. 

However, there was a tough side to Mogae’s treatment of investors. For instance, he deported (PI’d) a Bank manager who allegedly said Batswana have a ‘cattlepost mentality’ and blue-collar clients were dirty and smelly.

 By this Mogae sent out a clear message that investors should not run roughshod over Botswana.

 …the Choppies controversy

 Festus Mogae was a model career public servant, who went through the mill. 

Towards the end of his illustrious career he ventured into business, picking a close relationship with the Choppies group – as its Board Chairman and one of its subsidiaries, 

Far Properties. This turned out to be one of the lowest points of his career. After benefiting from his influence as a former President the Choppies group humiliated and dumped him, calling him a “useless old man who slept during meetings and who does not know retail business”. In 2019 - 2020 Mogae-Choppies fall-out played itself in the media, bringing to question how a genius economist could be ‘played’. 

Perhaps a lesson learnt about whether an ex-President ought to work and the value he carries. Positively, Choppies would still count as part of his legacy - a homegrown retail multinational riding at the back of political power. 

*The Authors write in their personal capacities.