This article discusses the restoration of fiscal balances in Botswana after prolonged deficit financing. Botswana is a diamond-export-dependent country; resultantly, it suffered revenue losses due to depressed demand for diamonds during the global economic crisis. Reduced revenues necessitated deficit financing between 2008/09 and 2011/12. Debt was financed through dissaving and borrowing. However, the government restored budget balances in April 2012. While this case study is Botswanaspecific, there are general lessons. These are: using a crisis to introduce public finance reforms; eschewing populism aimed at short-term gains; and the need for politicians to take very bold decisions to guide fiscal policy.

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