Why Boko looks to the East

President Duma Gideon Boko is courting China and Middle Eastern investors to finance Botswana’s industrialisation , betting that foreign partners will provide capital and technology without sovereign guarantees in exchange for returns from concessions lasting up to 30 years.

With government debt rising to P86.3 billion in June from P71.6 billion in March 2025, Boko is promoting grants, co-investment and concessions as alternatives to borrowing. His ambitions span mineral processing and electric mobility, as well as converting electricity into computing power for artificial intelligence.

While China is emerging as a key partner in that strategy, Boko says he is keeping the United States in play, arguing that Botswana can work with competing powers and that interest from one investor could encourage others to improve their offers.

Asked by The Business Weekly & Review after his first state visit to China whether closer ties with Beijing would bring fresh Chinese loans, Boko said the government wanted to avoid increasing its sovereign debt exposure.

“At the level at which our economy is, we do not want any form of exposure that adds to the sovereign debt,” he said at a press conference on the outcomes of the China visit.

“And so when we engage with an investor, we say, are you prepared to put out the money without requiring any guarantees from us? Because we do not want to give guarantees.”

Boko said some investors had agreed to those terms, with Botswana taking a share of the proceeds, albeit a smaller one than the investors, who must first recoup their capital.

“We are making money together. Of course, they get a larger chunk because they have to recoup their investment. That is business.”

He did not rule out borrowing, arguing that the key consideration was how the money would be used.

“There is nothing wrong with borrowing. There is everything wrong with not knowing what you are borrowing for,” he said. “If you borrow to produce, then maybe your borrowing is justified.”

In describing the China partnership, however, Boko emphasised grants and co-investment, particularly in processing and beneficiation.

“So that we don’t have to borrow,” he said. “Investments are deployed. Returns will be realised over a period of time.”

His remarks did not identify which projects would operate under 30-year concessions, disclose proposed revenue-sharing arrangements or explain how the agreements would allocate risk if earnings fell short of expectations.

The debt behind the diplomacy

China’s footprint in Botswana’s public debt is small and has declined sharply. Its recorded bilateral loan balance fell 97.6 percent, from P520.1 million in 2014/15 to P12.3 million in 2021/22, the latest year for which the public debt table provides a figure.

In 2014/15, China accounted for about 65 percent of Botswana’s loans from foreign governments but only about 2 percent of total government debt.

Other bilateral lenders have different exposure profiles. Japan had the largest reported balance in March 2026, at P1.52 billion, compared with P31.8 million for Kuwait. The United States and Belgium had balances of P2 million and P1.4 million, respectively, in 2014/15, although no recent figures were provided for either country.

Multilateral lenders account for the bulk of Botswana’s external debt. Loans from international organisations stood at P26.33 billion in March 2026, representing about 94 percent of the external total.

The African Development Bank category accounted for P13.41 billion, followed by the International Bank for Reconstruction and Development at P8.41 billion and the OPEC Special Fund at P4.34 billion.

Government guarantees add another layer of exposure. In March 2026, government-guaranteed debt stood at P8.67 billion, bringing direct government debt and guaranteed debt combined to P92.61 billion.

Beijing, with Washington kept in view

Botswana and China used the visit to elevate their relationship to what Boko described as a comprehensive strategic cooperative partnership, covering mining, agriculture, industrial development, health and digital transformation.

Boko said Botswana had initially “heavily pivoted to the Middle East” in search of long-term investors with specialised technology before stepping up engagement with China. Roads, railways and airport upgrades were among the opportunities he identified.

“And we will have China by our side, hand-holding, helping and guiding,” he said.

Boko does not, however, view closer ties with Beijing as a choice against Washington.

“Engaging with A does not preclude engagement with B, because A and B themselves are engaging with each other,” he said, adding that further announcements involving American investment could follow.

The strategy is to broaden Botswana’s options rather than commit the country exclusively to one source of capital. Competition among prospective partners could strengthen the government’s negotiating position, provided the resulting agreements offer clear economic benefits without transferring excessive risk to the state.

What has been promised

According to Boko, China has pledged a P400 million grant for agreed national priorities and P40 million in medical equipment and consumables. China is also expected to fund the Mmopane -Block 8 road in full through grant assistance, with construction envisaged to begin in early 2027.

Cooperation also extends to cataract surgery, public-service training and smart education. On trade, Botswana’s citrus exports could gain access to the Chinese market, while eligible products may qualify under China’s zero-tariff initiative.

The more ambitious industrial projects, however, have yet to be fully funded.

Boko said the Southern African Customs Union (SACU) had identified Botswana as a hub for electric mobility and that partnerships with Chinese companies would help establish local manufacturing capacity.

“Through partnerships with China, a global powerhouse in electric vehicle manufacturing, we aim to build local production capacity, grow our economy and create jobs for Batswana,” he said.

Diamonds also remain central to his economic outlook. Boko said Chinese jewellers had shown interest in combining gold with Botswana’s natural diamonds, suggesting potential opportunities to develop new products and markets.

“Natural diamonds are going to be in high demand very soon,” he said. “The problem and question we will be facing is whether we will have enough supply to meet the rising demand.”

His energy ambitions extend beyond household consumption and conventional industry. Recalling an initial ambition to generate 10 gigawatts of electricity, Boko said Botswana could eventually need more than 30 gigawatts as new industries develop.

Part of that electricity, he argued, should power computing infrastructure for artificial intelligence, whose substantial energy requirements could create another avenue for economic diversification.