The Bank of Botswana (BoB) has effectively lost control over key aspects of monetary policy with the country’s overall macroeconomic framework described as “unbalanced and unsustainable.” This is according to the latest Econsult Botswana Economic Review for the third quarter of 2025.
Economists at Econsult, led by former BoB Deputy Governor Dr. Keith Jefferis, warn that the central bank’s policy tools have become ineffective under the current mix of loose fiscal spending, low interest rates and a fixed exchange rate regime. The report argues that Botswana has stumbled into a classic economic dilemma known as “The Impossible Trinity,” where a country cannot simultaneously maintain a pegged exchange rate, independent monetary policy and free capital flows. The report warns that if the overall macroeconomic policy framework is unbalanced, there will be economic instability with potentially adverse outcomes.
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