The 2026/27 Budget themed “A new era of economic transformation and fiscal prudence” marks a deliberate policy pivot. It acknowledges that Botswana can no longer rely on mineral revenues to sustain growth and rising expenditure. The budget serves as an introduction for the NDP12 and the Botswana Economic Transformation Plan (BTEP).
Key Highlights
| 2026/27 | 2025/26 | Change | |
| Revenue and grants | P77.22 bn | P71.22 | 8% |
| Expenditure | P103.58 bn | P96.70bn | 7% |
| Deficit | P26.35bn | P25.48bn | 1% |
Budget Highlights
- Top Ministry Allocation: Minerals & Energy (P5.23B for development)
- Revenue Diversification: Non-mineral sources now exceed mineral revenue
- Debt Management: Public debt approaching 40% statutory ceiling
- Economic Rebound: Recovery from previous slowdown with 3.1% growth target
The recurrent budget increases by 2.8% from the previous year, with key allocations:
| Recurrent Budget | Allocation (P bn) | Share |
| State Presidency, Defense and Security | 13.05 | 19.25% |
| Local Government and Child Welfare | 12.99 | 19.16% |
| Basic Education and Child Welfare | 11.83 | 17.45% |
| Health | 7.51 | 11.08% |
| Higher Education | 7.37 | 10.87% |
| Lands and Agriculture | 2.41 | 3.56% |
| Transport and Infrastructure | 1.93 | 2.85% |
| Trade and Finance | 2.34 | 3.45% |
| Other Ministries | 8.35 | 12.32% |
| Total | 67.78 | 100% |
Development Budget
Major infrastructure and development projects by ministry:
| Development Budget | Allocation (P bn) | Share |
| Minerals and Energy | 5.23 | 22.37% |
| Transport and Infrastracture | 3.86 | 16.51% |
| Water and Housing | 3.62 | 15.48% |
| Local Government and Traditional Affairs | 2.86 | 12.23% |
| State Presidency, Defense | 1.99 | 8.51% |
| Lands and Agriculture | 1.77 | 7.57% |
| Other Ministries | 4.05 | 17.32% |
| Total | 23.38 | 100% |
Tax Policy Reforms
The government is implementing comprehensive tax modernization to broaden the revenue base and reduce diamond dependence:
i. Personal Income Tax (Pay-As-You-Earn)
New Top-Earner Bracket: Individuals earning P400,001 and above annually will pay an additional 2.5% tax from 25% to 27.5%
ii. Corporate Income Tax
Rate Increase: Corporate tax rate will increase by 3% from 22% to 25%.
iii. Value Added Tax (VAT)
–Expansion of VAT Base: The zero-rated list will be reduced to raise the effective VAT rate
-VAT on Remote Services: New taxation on digital and remote services (aligned with international best practices)
-Electronic Invoicing: Mandatory e-invoicing system launching April 2026 for real-time
Economic Indicators
- GDP Growth Projection: 3.1%
- Inflation Rate: 3.9%
- Public Debt to GDP: 44.66% (by end of FY 2026/2027)
- Foreign Exchange Reserves: P47.4 Billion (5 months of import cover)
- Monetary Policy Rate: 3.5%