Selected Issues Papers

Botswana faces mounting macroeconomic risks from intensifying climate trends and fiscal strain from electricity subsidies. Rising temperatures, more frequent extreme heat, and longer droughts threaten agricultural yields, labor productivity, and long-term growth. Electricity subsidies further compound these risks, limiting the government’s capacity to respond effectively. This paper examines the macroeconomic and fiscal implications of climate shocks, outlines priorities for adaptation measures, and proposes energy sector reforms to reduce subsidy burdens. Aligning climate resilience and energy security with fiscal sustainability is critical to safeguard development.