Structural Reforms to Support Fiscal Consolidation

Botswana faces growing fiscal challenges driven by declining diamond revenues, rigid expenditure, and weakened fiscal institutions, contributing to elevated fiscal deficits and rising public debt. These pressures underscore the need for timely reforms to safeguard fiscal and external sustainability. Drawing on recent IMF technical assistance—including TADAT, PIMA, and Financial Reporting Framework assessments—this Selected Issues Paper summarizes priority structural fiscal reforms to support fiscal consolidation. Recommendations focus on strengthening tax administration, improving budget preparation and execution, enhancing transparency, and raising the efficiency of public investment. Together, these reforms aim to restore fiscal sustainability, reinforce institutional credibility, and help Botswana adapt to a more constrained economic environment while protecting long-term development objectives.