Volume 26 • Issue 1 • Year 2026
Applied Econometrics and International Development
Research Article

An Empirical Analysis of the Impact of Government Expenditure on Economic Growth in Botswana

Pages: 41-49

Authors

Henry Muleya1, Kealeboga Taboka Sekgopa2 Leward Jeke3 Robson Manenge4 Sanderson Abel5

Author Affiliations

  • 1Lupane State University, Department of Accounting and Finance, Bulawayo, Zimbabwe
  • 2Department of Agricultural and Applied Economics, Botswana University of Agriculture and Natural Resources
  • 3Department of Economics, Nelson Mandela University, Port Elizabeth, South Africa
  • 4Midlands State University, Gweru, Zimbabwe
  • 4Department of Economics, Nelson Mandela University, Port Elizabeth, South Africa & Department of Agricultural and Applied Economics, Botswana University of Agriculture and Natural Resources

DOI

https://doi.org/10.64067/2660-7409.26.i1.05

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Abstract

Government expenditure plays a critical role in promoting economic growth through the provision of public goods, infrastructure develop ment, education, healthcare, and social protection services. In developing economies, public spending is often regarded as an important policy instrument for stimulating economic activity and enhancing long-term development. Botswana has experienced remarkable economic growth since independence, driven by prudent fiscal management and effective utilisation of mineral revenues. Despite this success, concerns remain regarding the efficiency and sustainability of government expenditure in supporting economic growth, particularly in the face of declining diamond revenues and increasing fiscal pressures. This study investigates the impact of government expenditure on economic growth in Botswana. Annual time-series data covering the period 1980-2025 are utilised. The study employs the Autoregressive Distributed Lag (ARDL) model to examine both short-run and long-run relationships between government expenditure and economic growth. Gross fixed capital formation, foreign direct investment, trade openness, and inflation are incorporated as control variables. The findings reveal that government expenditure exerts a significant negative effect on economic growth in both the short run and long run, while trade openness positively influences growth. Gross fixed capital formation contributes positively to growth, whereas foreign direct investment and inflation have insignificant effects.

Keywords

  • Government Expenditure
  • Economic Growth
  • Botswana, ARDL
  • Fiscal Policy
  • Public Spending

How to Cite

Henry Muleya, Kealeboga Taboka Sekgopa, Leward Jeke, Robson Manenge and Sanderson Abel. (2026). An Empirical Analysis of the Impact of Government Expenditure on Economic Growth in Botswana. Applied Econometrics and International Development, 26(1), 41-49. https://doi.org/10.64067/2660-7409.26.i1.05

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