GABORONE (Reuters) – Botswana’s 2021/22 budget deficit has widened to 5.1% of GDP as the country uses funds to finance its recovery from the COVID-19 pandemic, Finance Minister Peggy Serame said on Monday, adding however the economy’s rebound remained strong.
While the 10.1 billion pula ($869 million) deficit was lower than the 16 billion pula seen in 2020, it was wider than an earlier estimate of 3.7% made last year.
“The government will incur another budget deficit this year to support economic recovery stimulus,” Serame said in her annual budget speech.
“Economic recovery continues to be strong, underpinned by a successful vaccinations campaign,” she continued, adding however there were risks to the outlook such as the emergence of new coronavirus variants.
The country forecast economic growth of 9.7% in 2021 and 4.3% in 2022. The deficit is expected to fall to 6.98 billion pula or 3.2% of GDP in 2022/23.
Serame proposed a significant cut in recurrent expenditure, such as a reduction in the wage bill, to manage the 2022 deficit, though overall spending will increase slightly as the government ups finance for new and existing infrastructure.
Revenues, which are driven by sales of diamonds, are expected to rise from 63.4 billion pula in 2021/22 to 67.8 billion pula the year after.
($1 = 11.6279 pulas)
(Reporting by Brian Benza; Writing by Emma Rumney; Editing by Toby Chopra and Alison Williams)
