The recently released Bank of Botswana Annual Report for 2025 contains a wealth of useful information about both the central bank and the economy. One of the highlights is that BoB generated a large increase in the amount available for distribution to Government, which jumped sharply from P4.07 billion in 2024 to P7.29bn in 2025. The bulk of this came from two sources. The first was gains on the sale of assets, essentially profits that were realised on the sale of Pula Fund assets as those assets were liquidated as part of the selling down of the foreign exchange reserves. This represents a fortunate one-off source of income, and partly resulted from the fact that the assets were sold when markets were strong.

The second source of income was profit from foreign exchange (FX) deals. As many people will be aware, BoB introduced a major change to foreign exchange trading in July 2025, widening its buy/sell spread on FX trading with banks from 1% to 15%. This inevitably led to changes in the rates at which banks trade FX to their customers (and adversely affecting both buyers and sellers of FX). BoB’s profit from FX trading increased massively from P32.6 million in 2024 to P1,507.2 million in 2025.

While many people have blamed the banks for “profiteering” from the new FX regime, it is evident from these figures that the main beneficiary has been the BoB (and indirectly, the government, making the FX margin changes a de facto tax increase). Given that the FX margin change only occurred in July 2025, the increase will be even bigger on an annual basis.