07 Dec 2022

The Organisation of the Petroleum Exporting Countries Fund for international development (OPEC Fund) Loan Authorisation Bill ignited mixed opinions among legislators after it was presented for second reading as a matter of urgency by the Minister of Finance Ms Peggy Serame in Parliament, Tuesday.

The bill seeks to authorise the raising by government of a loan from the OPEC Fund for purpose of budget support for economic resilience and green recovery programme.

In his debate, Okavango MP Mr Kenny Kapinga appealed to government to consider having good justifications to borrow to avoid falling into economic pitfalls due to excessive borrowing.

He said pragmatic financial management entailed being prudent with the already available resources and expressed concern that the prudence that characterised Botswana’s financial management was slowly fading away due to low adherence to noble standards.

Mr Kapinga said the minister should have highlighted regulatory issues that would jump-start the economy which was in a dire situation.

He appealed to government to borrow with a sense of restraint saying excessive borrowing could lead to severe financial challenges.

Nata-Gweta MP Mr Polson Majaga said it was common practice for international financial institutions to assist countries for the purpose of budget support.

He said Botswana was wallowing in economic hardships and a lot needed to be covered such as Ipelegeng wages and several development projects.

Mr Majaga said the request by the minister was done timely, especially after the presentation of the Transitional National Development Plan (TNDP).

He urged government to speed up the implementation of the projects once the loan request had been acceded to.

Mochudi East MP Mabuse Pule said the request by the minister reflected good planning on the part of government.

He said those who were to lend government money were satisfied with the country’s creditworthiness.

He said the budget support request would be able to address a lot of developmental challenges, especially in rural communities where resources are a challenge.

Mr Pule said other pressing issues of national interest such as food security, cushioning of petroleum prices and creating jobs would be addressed.

Francistown West MP Mr Ignatius Moswaane said it was proper for the executive to bring requests for approval by Parliament but had to establish clear reasons for such.

He said the opposition bloc was not part of the ruling BDP and it was proper for minister Serame to have explained to Parliament what her request intended to achieve.

He said even though lending to support the development budget was meant to benefit Batswana it was not what was on the ground in Botswana.

He urged government to ensure that loans should be able to create employment for Batswana through proper investment.

Molepolole South MP Mr Kabo Morwaeng said the request as presented by the minister was done in good faith to assist Batswana with their different needs.

He said government had appreciated different developmental needs as some had already been reflected in the RESET Agenda.

He said BDP led government had a proud history of doing things procedurally. He explained that any country depended on lending for any developments.

Shashe West MP Mr Fidelis Molao said the bill was a proper request that had come in handy in the midst of economic difficulties.

He said emerging from the hardships of the COVID-19 pandemic they were challenges along the way and it was only necessary for the minister to request raising a loan for economic resilience.

Mr Molao said there were pressing needs such as funding the recently announced upgrading of subordinate authorities and other developmental projects. He said there was no need to be concerned with lending because government had set limits for borrowing.

Jwaneng – Mabutsane MP Mr Mephato Reatile said the request by the minister was in a way creating trouble for future generations.

He alleged that borrowing in Botswana was not meant to empower and promote locals but only foreigners who had a huge stake in the country’s economy.

Lobatse MP Dr Thapelo Matsheka said as far as consolidation and fiscal discipline was concerned Botswana was at crossroads.

He said it was important to avert what was coming in a manner which would not indebt the country.

He said the Transitional NDP had spelt out fiscal risks such as public service salaries and wages which he said were unsustainably high.

He said the request should not have an impact on intergenerational equity as those who would pay the loan were not the current generation but future generations. He said this should be balanced carefully.

Dr Matsheka said government must start dealing with the efficiencies now to avoid carrying the burden into the future.

He said it was also important to consider supporting a one-year budget with a 17-year-old loan facility. ends