Gov’t Debt Surges to P40.93 billion

The Auditor General has disclosed that the government's outstanding debt reached a record of P40.93 billion, attributable to both domestic and external borrowings. The increase in both external and internal borrowing also drove the country’s government debt-to-GDP ratio. [ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,3,4" ihc_mb_template="1" ] In an executive summary of the Annual statements of accounts for the financial year ended 31 st March 2022, Accountant General, Kealeboga Molelowatladi states that: “There was a notable increase in total outstanding debt in financial year 2021/22, which was attributable to increase in both external and domestic borrowing.” According to Molelowatladi, the total gross debt outstanding amounted to P40.93 billion, a 20 percent increase from the amount outstanding at the corresponding period in the previous financial year. He said external debt outstanding (including guarantees) amounted to P23 billion, which is a 14 percent increase from the amount outstanding at the end of the previous fiscal year. “The increase in external debt outstanding was mainly driven by the disbursement of two budget support loan facilities; a USD 250 million from the World Bank Group (International Bank for Reconstruction and Development-IBRD) as well as US$137 million from the African Development Bank (AFDB),” explained Molelowatladi. He added that these loans were crucial in supporting the Government’s post-COVID-19 economic recovery programme. The Auditor General noted that domestic debt outstanding (including guarantees) as at the end of March 22 was P25.31 billion, a 14 percent increase from the amount recorded at the end of March 2021. “The increase in domestic debut outstanding was driven by the continued rolling out of the P30 billion Issuance Program, which came with an increase in the frequency of Government security auctions from quarterly to monthly basis. The Note Issuance Programme upper limit was increased from P15 billion in 2020 to address the limitations of the domestic bond market identified in the review of the programme, back in 2019,” he said. At the end of the financial year 2021/22, Molelowatladi said, total debt-to-Gross Domestic Product (GDP) ratio stood at 22.3 percent. External debt to GDP stood at 10.6 percent while Domestic Debt was 11.7 percent of GDP. In the fiscal year 2021/22, Molelowatladi addressed the issue of revenue collection, noting that many business operations were still grappling with the aftermath of the COVID-19 pandemic, impacting their cash flow as some companies operated below full capacity. Consequently, he explained that certain companies were unable to meet their tax obligations, significantly affecting the revenue collection of the Botswana Unified Revenue Services (BURS). The tourism sector, he highlighted, was particularly impacted by restrictions on international travel, even after the relaxation of some COVID-19 protocols, leading to a shortfall in revenue. Regarding other matters, Molelowatladi stated that the government's initiative to change pay dates was successful, achieving its initial goal of distributing the flow of money in the economy throughout the month. This is in contrast to the previous pay management system, where buying power was concentrated mainly toward the end of the month. “The economic activities are spread throughout the month and this is evidenced by feedback from employees, the public, and small businesses,” he said. In its efforts to establish a modernised accounting system aimed at enhancing productivity for the provision of quality service delivery, the Ministry of Finance, according to Molelowatladi, continues to face challenges in the following areas: Government Accounting and Budgeting System was implemented as an Integrated Financial Solution in 2004. He said with time the system has experienced challenges of performance degradation especially because it was implemented with a number of bespoke or customised elements and controls. “These customised elements have increased dramatically as the need for better service increases, making it difficult to manage overall system performance and carry out requisite software updates. These have been of great concern particularly with regards to system support and maintenance issues,” said Molelowatladi. Another challenge is the lack of requisite knowledge and skill sets for the transition to an accrual basis of accounting may hamper progress if not addressed on time, he said. “As a result, the Office continues to enroll officers on capacity building programmes in the areas of International Public Sector Accounting Standards, Public Finance Management, Planning and Control, Cash Management and Enterprise Risk Management,” said Molelowatladi. Despite noncompetitive salaries in the public sector and high mobility for those trained by the government, he noted that technical skills required to drive the transition from cash to accrual basis of accounting projects are gradually improving. [/ihc-hide-content]

Rollers secures P8 million sponsorship boost

Orange Phikwe Marathon delivers millions for town

CEDA backs Beyond 40 Walk

FIRST CAPITAL BANK BOTSWANA OFFICIALLY OPENS IT’S INAUGURAL FCB PADEL CUP

Orange backs Letsile Tebogo’s cancer foundation

Beyond 40 Walk seeks corporate backing

Rollers secures P8 million sponsorship boost

Orange Phikwe Marathon delivers millions for town

CEDA backs Beyond 40 Walk

FIRST CAPITAL BANK BOTSWANA OFFICIALLY OPENS IT’S INAUGURAL FCB PADEL CUP

Orange backs Letsile Tebogo’s cancer foundation

Beyond 40 Walk seeks corporate backing

Gov’t Debt Surges to P40.93 billion

Debt driven by increased borrowing

Navigation

Recent News

Site

Welcome Back!

Create New Account!

Retrieve your password

Not enough quota to unlock this post

Are you sure want to cancel subscription?

Gov’t Debt Surges to P40.93 billion

Debt driven by increased borrowing

This content is locked

Navigation

Recent News

Site

Welcome Back!

Create New Account!

Retrieve your password

Not enough quota to unlock this post

Are you sure want to cancel subscription?