For years, the International Monetary Fund (IMF) has warned that Botswana’s growing public-sector wage bill is taking an ever-larger bite out of government revenue, leaving less money for development and essential services. In its 2025 Article IV consultation, the Fund recommended gradually reducing the bill to 11 percent of gross domestic product – a target that could force difficult choices about the size and cost of the civil service.
Vice President and Finance Minister Ndaba Gaolathe is making a different argument. Rather than put job cuts at the center of spending reductions, he says the government should first confront waste, inflated project costs and inefficient public administration.
Speaking to young people at the Youth Budget Pitso in Selebi-Phikwe, Gaolathe said Botswana could no longer afford to spend beyond its means. But he argued that the first question should not be how many people the government employs. It should be how public money is spent.
“Our version of cutting is not the same as your version,” he said, referring to pressure from international organizations.
Gaolathe said ministries would have to account for the price of their projects. Officials, he said, should explain why a project needed to cost billions when it might be delivered for a fraction of that amount.
“No, no, you need to explain why this thing should cost three billion and not five hundred million,” he said.
His message was that government should challenge the assumptions behind costly projects, scrutinize procurement and demand clearer evidence that public spending delivers value. He also called for a more capable administration, saying processes that once took months should be completed far sooner.
The debate comes as Botswana faces mounting fiscal pressure. A prolonged downturn in the diamond industry has weakened government revenue and exposed the risks of relying heavily on mineral earnings to pay for public services and development. The government is now weighing how to preserve essential services and fund investment while putting public finances on a more sustainable footing.
Its response includes efforts to contain spending, collect more revenue and make public institutions more efficient. On the revenue side, the government is pursuing tax reforms, tighter compliance and an overhaul of tax administration. Budget measures include extending value-added tax to some remote services, introducing electronic invoicing to limit revenue losses and proposing higher taxes on top personal income earners. The aim is both to broaden the tax base and to collect more reliably the taxes already owed.The government is also looking beyond diamonds. The Botswana Economic Transformation Programme is intended to encourage private-sector investment, expand productive activity and create jobs in other industries. But building those sources of growth will take time. For now, managing expenditure remains an urgent task.
Technology, too, features in Gaolathe’s case for doing more with fewer resources. He pointed to software development as an area where government could rethink traditional contracting, saying that projects that once took a year might be completed in two weeks with artificial intelligence.
That approach could, if carefully implemented, lower costs and speed up public services, while reducing reliance on expensive outside contractors. It would also require oversight: faster delivery cannot come at the expense of quality, security or accountability.
The IMF’s concern, meanwhile, is not limited to the government’s total payroll. In its 2025 consultation, the Fund said public-sector compensation exceeded 13 percent of GDP and absorbed about 58 percent of tax revenue—well above levels in many comparable countries. It warned that the burden was crowding out investment that could support growth, along with social spending.
The Fund has urged Botswana to adopt a medium-term plan to bring the wage bill closer to 11 percent of GDP. Its recommendations include restraining recruitment, tightening controls on promotions and allowances, tying wage increases to productivity, modernizing human-resources systems and shifting staff toward priority sectors.
Gaolathe’s emphasis on procurement and efficiency offers another route to fiscal restraint. Whether it can produce savings on the scale the government needs remains an open question.
