The Botswana Congress Party (BCP) has warned of ‘deepening fiscal instability’ following government’s move to raise the country’s debt ceiling from 40 percent to 60 percent of GDP.
The opposition party said Wednesday that the proposal, tabled before Parliament signals “serious budgetary problems” and reflects a government struggling to sustain its spending.
Government has argued that the increase is meant to provide fiscal flexibility rather than signal immediate borrowing. However, the BCP warned that current trends point to inevitable debt accumulation if spending patterns remain unchanged.
“While public debt currently stands at 33 percent of GDP, it is rising fast,” the party noted adding that the increase in the ceiling is likely to pass given the ruling coalition’s parliamentary majority and the risks associated with a potential government default.
“No one wants to risk Government default on obligations. That will be too damaging,” the BCP said.
Despite indicating it will not oppose the proposal, the BCP accused government of “hypocrisy and short-sightedness,” arguing that the root cause of the crisis lies in failure to align spending with declining revenues.
“The Government has failed to adjust its spending decisions to its structurally diminished revenues,” the statement read. “Instead, it prioritised political promises without answering the all-important question of how it funds them.”
According to the party, Botswana’s fiscal pressures stem from two key factors: a structural decline in the diamond industry long the backbone of the economy and what it terms policy missteps by government.
“The Government has failed to adjust its spending decisions to its structurally diminished revenues,” the statement read. “Instead, it prioritised political promises without answering the all-important question of how it funds them.”
The BCP cited what it described as excessive and non-essential expenditures, including the appointment of 153 specially nominated councillors, expansion of the executive arm of the public service, and the establishment of new embassies.
Further concerns were raised over planned spending commitments such as the creation of new state-owned enterprises and the proposed constitutional court, which the party claims is based on a “manufactured emergency.”
The opposition also pointed to a worrying liquidity crunch within government, revealing that outstanding invoices recently stood at P20 billion against cash reserves of just P2 billion.
“This is not sustainable. It is a clear threat to macroeconomic stability and economic recovery,” the BCP warned.
As a condition for supporting the debt ceiling increase, the party has called on Parliament to impose strict fiscal discipline measures on government borrowing.
The BCP also urged sweeping public sector reforms aimed at eliminating inefficiencies, reducing redundancy, and rationalising state-owned enterprises.
These include the introduction of a comprehensive fiscal consolidation strategy, combining revenue mobilisation with aggressive cost-cutting measures—particularly a reduction in executive travel.
The BCP also urged sweeping public sector reforms aimed at eliminating inefficiencies, reducing redundancy, and rationalising state-owned enterprises.
In addition, the party called for the suspension of all non-essential expenditure, arguing that government should prioritise critical sectors such as health, education, infrastructure, and economic recovery.
“The primary focus should be on rebuilding the economy and safeguarding essential public services,” the statement emphasised.
The BCP further proposed the introduction of progressive fiscal triggers tied to debt thresholds, which would compel government to implement stricter measures as borrowing rises.
