10 Nov 2020

Government is working on various interventions to mitigate the effects of the COVID-19 pandemic on the economy and stimulate commercial activity, Minister of Finance and Economic Development, Dr Thapelo Matsheka has said.

Addressing a press conference  in Gaborone yesterday, Dr Matsheka expounded on the economic recovery and transformation aspects of the State-of-the-Nation- Address (SONA) pronounced Monday by President Dr Mokgweetsi Masisi.

Dr Matsheka explained that the Economic Recovery and Transformation Plan (ERTP), approved by Parliament in September to supplement the  National Development Plan (NDP) 11 would fast track economic recovery.

He said with the domestic economy having contracted in the current financial year, key sectors such as mining and tourism under performing and the deficit projected to increase to an estimated 7.2 per cent, ERTP would assist in stimulating the economy.

The plan included an Industry Support Facility aimed at assisting businesses to meet their working capital thus lessening the effects of COVID-19 induced economic downturn, said Dr Matsheka.

He said through the facility, P1.3 billion would be disbursed to assist businesses with P900 million allocated to general industry, P200 million to tourism and P100 million each to agriculture and the informal sector.

The minister explained that informal sector funds would be disbursed through the Local Enterprise Authority (LEA) with recipients registered on the  organisation’s database receiving a P1 000 once off grant.

Only citizen informal traders would be eligible for the LEA administered funds, he said.

Dr Matsheka said a further P300 million would be administered through the Citizen Entrepreneurial Development (CEDA) with small businesses  having recorded an up to P10 million turnover the previous year benefiting from a loan equivalent to not more that 10 per cent of the turnover. 

Only citizen owned companies would benefit from the unsecured loans, which would be disbursed at bank rate (currently 3.75 per cent), to assist with operating costs as well as short to medium term working capital needs, Dr Matsheka disclosed.

The National Development Bank (NDB) would allocate loans for small, medium and large agribusiness, general business and tourism firms, the minister said.

He said large corporations with a previous year’s turnover of over P25 million would be assisted through the Botswana Development Corporation (BDC).

Dr Matsheka further revealed that citizen and non-citizen firms borrowing from NDB and BDC would have to sign an undertaking not to reduce employment levels for the 30-month loan period.

 They would also have to procure goods and services locally, he explained.

In order to stimulate economic activity and fast track recovery, government would invest P14 billion in road, rail and information communication technology (ICT) infrastructure by the end of NDP 11 in 2023. 

Envisaged projects include constructing a dual carriage-way across the A1 road and upgrading strategic roads used to transport goods across Botswana to other parts of Southern Africa, Dr Matsheka said. ends