06 Sep 2020

Botswana has not defaulted on any of her debt payments obligations, both domestic and international, says Minister of Finance and Economic Development, Dr Thapelo Matsheka. 

This, according to Dr Matsheka rendered the country secure from foreclosure or any repossession by the creditors. 

Responding to a question in Parliament on September 3, Dr Matsheka said the total public debt and guarantees stood at P39.3 billion as at July 2020 with  P30.6 billion as government debt of which  P15.52 billion was external debt while  P15 billion was domestic.

"Publicly guaranteed debt amounted to P8.67 billion and comprised of P6.90bn external guaranteed debt and P1.76bn being domestic guaranteed debt. Dr Matsheka indicated that government currently had no overdraft as part of its debt portfolio.

Dr Matsheka further said public debt to GDP ratio as at July 2020 was 20.3 per cent; of which external debt to GDP was 11.5 per cent while domestic was 8.85 per cent. 

According to Section 20 of the Stock, Bonds and Treasury Bills Act,  the total public debt including guarantees is capped at  40 per cent of the GDP; 20 percent being external and 20 per cent as domestic debt.  

Dr Matsheka said Botswana’s public debt to GDP ratio was ‘considered very conservative, saying it is because of the country’s vulnerability.’

He said the ratio was even below the SADC Macro Economic Convergence cap of 60 per cent.

Furthermore, Dr Matsheka said a large proportion of the government portfolio was acquired from the African Development Bank (AfDB). 

He said total loans acquired from AfDB made up 77 per cent of the total government debt portfolio as at July 2020.

Molepolole North MP Mr Oabile Regoeng had asked the minister to state the extent of Botswana government’s indebtedness through external and domestic borrowings, overdrafts, guarantees or any other form of debt. 

He also asked the minister to state the current debt to GDP ratio as well as the current borrowing limit and whether it had not exceeded the set limit.  BOPA