Economics – Macro & Markets · Editorial

By Moakanyi Magazine · June 2026

Outsourcing was sold for years as the efficient choice for government services – cheaper on paper, lighter on the state's payroll, easier to scale up or drop. Botswana is now testing the other side of that ledger. Minister Moeti Mohwasa has explained an insourcing policy, set out in June 2026, intended to improve public service, create secure jobs and reduce the state's reliance on contractors.

The shift reverses a default that dominated public-sector reform across much of the world for three decades. Where outsourcing moved work out to private firms, insourcing pulls it back inside government – and with it, the cost, the control and the employment that come attached.

The Rationale: Quality and Secure Jobs

The case the minister set out rests on two claims: that bringing services back in-house improves their quality, and that it creates secure jobs in place of contract-dependent work. Both are arguments about control – over standards the state can enforce directly through its own staff, and over employment it holds rather than tenders out to firms whose incentives are to deliver the contract, not exceed it.

Insourcing typically trades the flexibility of contracting for the stability of direct employment. The state takes on staff and obligations it had pushed outward, on the expectation that closer control delivers a more dependable service than a contract can specify. The theory behind it is straightforward: a contract can only buy what it manages to define in advance, and many public services – cleaning a clinic well, maintaining a school properly – resist tidy definition, leaving gaps that an in-house workforce, accountable to the same employer as the service, is better placed to close.

A service the state runs itself is a service it can be held to.

The Trade-off: Reliance Versus Cost

Reducing reliance on contractors removes a layer of dependency, but it relocates the cost rather than erasing it. Wages, management, pensions and long-term obligations that sat on a contractor's books move onto the government's. The policy's success will turn on whether the gain in quality and job security justifies that transfer – and whether the state can manage the work as efficiently as the firms it is replacing, which is not guaranteed.

For Botswana, where public employment carries real weight in the labour market and the wage bill is already a significant claim on revenue, the promise of secure jobs is part of the policy's appeal and part of its long-term test. Secure jobs are also fixed costs, harder to unwind than a contract and persistent through the lean years as well as the good ones. The international record on insourcing is mixed precisely here: it can lift service quality and worker security, and it can also entrench costs that a future budget struggles to carry.

Bringing the work home brings the bill home with it.

The Operator's Read: A Narrowing Outsourcing Market

For private contractors who have built businesses on government work – facilities, catering, maintenance, cleaning – the policy is a direct signal about a shrinking customer. A state moving to insource is a state reducing the tenders those firms depend on, and the prudent response is to read the direction early: diversify away from public contracts, or move up the value chain into services the government cannot easily bring in-house. The same shift that promises secure jobs inside government removes them from the firms outside it, and that redistribution is the part of the policy operators should be modelling now.

When the state insources, its suppliers must find a new customer.

The insourcing policy is a deliberate bet that direct control beats contracted convenience for the services that matter most to citizens. The so-what is structural: the government is accepting more cost and more staff in exchange for quality it can command and jobs it can guarantee, and the coming budgets will show whether that exchange holds. For operators on the supply side, the message is to plan for a narrower public market – the bill the state is bringing home is one it was previously paying to them.

Sources: allAfrica