- Govt has already approached AfDB for $179, 660,000 and the World Bank for $150, 000,000
- The funds are sought to address aftershocks of COVID-19 pandemic and other economic headwinds
The Minister of Finance, Peggy Serame, is expected to table two bills before Parliament during this winter session seeking the House to approve loans running into billions from the World Bank and the African Development Bank (AFDB).
This was after the government wrote letters to the two international financial institutions seeking $150 million (about P2 billion) and $179 million (about P2.3 billion) respectively to help the economy cope with the effects of COVID-19.ย While the World Bank Board and AFDB have approved the loans, the government has to obtain final approval from Parliament.
Rebound
The government turned to the AfDB and the World Bankโs lending arm, the International Bank for Reconstruction and Development (IBRD), as part of its external borrowing aimed at supporting the countryโs efforts to rebound from the pandemic. ย ย
Said Minister Serame, explaining the Economic Recovery Support (African Development Bank) (AFDB) Phase II (Loan Authorisation) Bill 2023, which was gazetted recently: โThe objective of the Bill is to authorise the raising by the government of a loan of an amount not exceeding $179, 660,000 from the African Development Bank (AFDB).โย The purpose of the funds, she explained, is to improve โfiscal efficiency and sustainability; supporting private sector-led agricultural and industrial sector transformation and enhancing resilience and social inclusionโ.
She said the proceeds of the loan authorised by โthis act shall be paid into the Development Fundโ and that all sums required to pay the loan and other charges on the loan shall be charged and paid out of the Consolidated Fundโ.ย Serame is also expected to present to Parliament โa paper containing a report on the loan which shall include the terms and conditions of the loan and any other information relating to the loan that the minister considers appropriate to includeโ.
Low carbon recovery
Regarding the World Bank loan, she stated: โThe objective of the Bill, is to authorise the raising by the government of a loan of an amount not exceeding US $150 000,000 from the International Bank for Reconstruction and Development.โ
She said the purpose of the loan is to support the governmentโs response to multiple shocks, strengthening private sector development and promoting a resilient, low carbon recovery. Like the loan from the AfDB, the proceeds of the loan authorised by โthis act shall be paid into the Development Fundโ and all sums required to pay the loan and other charges on the loan shall be charged and paid out of the Consolidated Fund.
On its website, the AfDB says the loan will ease private sector participation in the Botswana economy and promote climate-smart agriculture and industrial development. โThese include various revenue enhancing measures, establishment of a public procurement regulatory authority and facilitation of public private partnerships,โ it says. The loan is also meant to propel private sector-led agriculture and industrial transformation. โIt will achieve this through the approval of a national policy on agricultural development and transformation, creation of a meat industry regulator and improvement of the investment facilitation regime,โ says the continental bank.
Single social registry
Further, the loan is to enhance resilience and social inclusion, strengthen the policy framework for micro, small and medium enterprises (MSMEs), and promote adoption of a technical and vocational training policy and roll out of a single social registry. The World Bank Country Director for eSwatini, Botswana, Lesotho,Namibia and South Africa, Marie Francoise Marie-Nelly, said in a statement: โWe are pleased to support the governmentโs efforts to put Botswana on a more inclusive, resilient, and low-carbon growth path.
โThe effects of the COVID-19 pandemic and other global shocks have made the need to diversify the economy, create more jobs, and rebuild fiscal buffers more urgent.โ She noted that the objectives of this operation are to support Botswanaโs response to multiple shocks, strengthen the development of the private sector and promote a resilient, low-carbon recovery and that it is aligned with the last Country Partnership Framework.
