16 Sep 2020

Members of Parliament on September 15 passed a motion to authorise an increase of the bond issuance programme from a P15 billion limit to P30 billion in order to increase government’s revenue streams.

The Minister of Finance and Economic Development, Dr Thapelo Matsheka, presented the motion on September 7 and moved then that the issue be referred to the parliamentary Standing Committee on Finance and Estimates.

After a debate on the matter on Tuesday, MPs voted to pass the motion and Dr Matsheka thanked them for expressing their views in favour of the bond issuance increase.

Dr Matsheka also thanked the Finance and Estimates Committee for its work in presenting a report on the request, which he said had also included seeking advice from Bank of Botswana and Botswana Institute for Development Policy Analysis (BIDPA).

The minister also told Parliament that any issuance of bonds or funds borrowed through this scheme would be presented through the budgetary consolidated fund approved by parliament and as such promised MPs that the National Assembly would retain its oversight role.

Dr Matsheka also promised that government would always stay prudent in borrowing funds that were reasonable percentage in relation to the national gross domestic product (GDP) to ensure that the country does not fall into a debt trap.

Earlier on during the debate, MPs stated that Botswana had maintained a surplus budget and became apparent that the country was entering an unchartered territory of budget deficits because of magnitude of COVID-19 pandemic as is unprecedented on the little resources available.

They said the scenario of COVID-19 effects has called for the need to model on how the economy would perform and generate funds, as the country was unaware of how long the effects would remain prevalent.

Contributing to the debate,  Vice President, Mr Slumber Tsogwane said the bond issuance would add value to the Economic Transformation Plan which was recently presented by Dr Matsheka to aid economic growth as well as improve sustainable development after the effect of the pandemic which affected the economic status of Botswana.

He said that with the increased bond, they would be a need to invest in improving the digital economy to empower government to fast track economic growth, calling on use of internet and digitisation to easy access.

Mr Tsogwane, also Leader of the House and Boteti West MP, said the bond would enable the developments in rural areas which have long been anticipate and would further use as a tool to improve lives of Batswana in settlements as well in call for job creation.

He said this would improve the lives of Batswana adding that the bond would enable opportunities for Public Private Partnerships (PPP’s).

Selebi Phikwe West legislator Mr Dithapelo Keorapetse said the bond increase should stimulate state owned enterprises to be able to run their daily businesses even after COVID-19 pandemic.

He said, through the increased bond government would be able to fund business that were affected by pandemic, calling that the bond would also help Selibe Phikwe town which has been looking for other economic opportunities after closure of BCL mine.

He called on schemes like pension funds to invest their money in Botswana for project dissemination rather than investing on foreign countries as their investment would benefit the country in the long run as much as Batswana valuing their money which is controlled by Botswana Pension Fund.

Mr Keorapetse further said schemes like pension fund should be used to invest in developmental projects Botswana which would ease the pressure of the country away from borrowing funds from international banking institutions like International Monetary Fund (IMF) which cost the government a lot of during repayments.

Assistant Minister of Agricultural Development and Food Security, Ms Beauty Manake said through increased bond, agriculture should be core businesses in improving and acknowledging transforming economy.

She said for the purpose of building self-sufficient the government should support the agriculture sector through the increased bond by prioritising the agriculture sector. ENDS