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The Government of Botswana has suspended the issuance of Government Purchase Orders (GPOs) through its central financial management platform, the Government Accounting and Budgeting System (GABS), citing severe liquidity challenges.
According to a savingram issued by the Ministry of Finance dated July 10, the suspension will take effect from Monday, July 14, until July 31, 2025. The measure affects all Ministries, Departments, and Agencies (MDAs), which have been instructed not to generate either online or manual GPOs during this period.
The Ministry attributes the cashflow constraints to a significant decline in diamond sales, the country's primary revenue source. Rising public expenditures, despite earlier warnings to MDAs to limit spending, have compounded the situation.
"Despite the decreased revenue inflows, public expenditure has, on the other hand, increased, thus exacerbating the situation," read the circular signed by Permanent Secretary Dr. Tshokologo A. Kganetsano. The Ministry warned that continued borrowing to cover operating expenses and non-revenue-generating projects is unsustainable.
Recent loans from the Botswana Public Officers Pension Fund (BPOPF) and the Bank of Botswana, totalling BWP8.3 billion, were reportedly depleted within a week, used for salaries, social benefits, student fees, and debt repayments. Officials argue the funds should have been directed toward development projects capable of spurring job creation and boosting revenue.
While the GPO freeze is broad, the Ministry says it will consider exceptions on a case-by-case basis. Requests must be routed through the Permanent Secretary of Finance.
The move signals growing fiscal strain and comes as the government grapples with balancing declining revenues and essential expenditure ahead of the 2025/26 budget planning cycle.