Botswana’s economy is projected to contract by 0.4% in 2026, driven largely by a slowdown in the diamond sector. Diamonds account for a third of fiscal revenues and a quarter of GDP. This means the government has less money to spend, even before making any policy choices.
At the same time, the government has set about reducing debt as a share of GDP by cutting expenditure to stabilise the economy. This combination is forcing difficult decisions about public spending.
A key one is investment in social protection for older people. Over the past two decades, the number of older persons aged 60+ has doubled to about 279,111 people (roughly 8% of the population). In coming decades, that number is set to rise even more sharply. While this reflects important gains in life expectancy, it also presents a policy challenge: how to support an ageing population in a context of tightening public finances.
