The government borrowed a fresh P3.6 billion from the Bank of Botswana in September, returning to emergency-style short-term financing despite receiving a record P7.29 billion dividend from the central bank and raising billions through government securities amid improved investor demand.
The latest advance marks the third borrowing episode since February 2025, when dwindling diamond revenues and depleted cash reserves forced the ministry of Finance to seek temporary financing. An initial P2.5 billion advance was settled by September 2025, while a subsequent P3.2 billion facility, outstanding in December, was cleared by June 2026.
The renewed borrowing exposes continuing pressure on government finances despite expenditure controls that have helped narrow budget deficits.
The 2025/26 financial year ended with a deficit of approximately P16.8 billion, below the P25.5 billion projected in February. Government subsequently recorded a P2.51 billion surplus in the first quarter of 2026/27, which commenced in April.
By July, cumulative revenue had reached P34.67 billion against expenditure of P30.42 billion, producing a P4.25 billion surplus. However, revenue included the central bank’s exceptional P7.29 billion dividend, without which expenditure would have exceeded receipts by P3.04 billion.
The country’s fiscal savings have also come under pressure. The Government Investment Account, which once helped finance budget shortfalls without additional borrowing, fell from P8.7 billion in March to P3.2 billion in July, a 63.2 percent decline.
The Finance ministry has meanwhile continued raising funds from domestic investors. Government securities issued during the current 2026/27 financial year total P29.29 billion, although P19.26 billion was payment for maturing debt, leaving P10.02 billion in net additional issuance at face value.
Investor demand has remained healthy as yields have eased from their earlier peaks. The October auction attracted P10.94 billion in bids against P4.2 billion offered, with three-month Treasury bill yields averaging 5.6 percent, compared with 10.7 percent in March. Longer-dated bonds continued offering higher returns, with the June 2040 bond yielding 10.8 percent.
Despite the borrowing activity, the government’s financing requirements remain substantial. Total debt reached P91.46 billion in September, including P40.21 billion in bonds, P16.79 billion in Treasury bills and P750 million in direct commercial-bank loans.
Finance Minister Ndaba Gaolathe has revised the projected 2026/27 deficit down to P9.26 billion from P26.35 billion, citing improved revenue expectations and expenditure restraint.
The fresh central-bank advance, however, carries a repayment period of no longer than 92 days under the Bank of Botswana Act, adding another short-term obligation to Treasury’s financing requirements.