10 Aug 2023

Government is concerned about budget deficits that it authorised Minister of Finance, Ms Peggy Serame, to secure a loan of P2.3 billion from the African Development Bank (AfDB) to support the 2023/24 budget deficit.

This follows the passing to the committee stage of the Economic Recovery Support Programme (African Development Bank, phase II (Loan Authorisation)) Bill of 2023 which seeks to authorise the raising by government of a loan from AfDB for the purpose of budget support for the economic recovery support programme.

At the committee stage, MPs will propose final amendments before Parliament passes it and await the President to sign it into law.

Responding to comments from Members of Parliament on Tuesday, Ms Serame said the loan would finance part of the 2023/24 budget deficit of P7.59 billion. She said the deficit would be financed through a combination of domestic and external borrowing.

The finance minister said macro-economic forecasts predicted budget deficits in the short to medium term before returning to surpluses.

She said the deficits, together with the significant reduction of the

Government Investment Account (GIA), inevitably left government with limited options.

Earlier when debating the bill, Mr David Tshere, the MP for  Mahalapye West, said he supported prudent management of resources and responsible borrowing.

He called on government to improve its payment to local businesses, saying they were being closed and jobs lost because government failed to pay on time.

Mr Fidelis Molao of Shashe West said when the budget was approved, it was clear that part of the budget would be financed through loans.

He said it was surprising that some Members of Parliament were now against the bill which sought to fulfil what they approved.

Mr Sethabelo Modukanele of Lerala-Maunatlala also expressed his support for the bill, saying when the budget was passed it had a deficit.

Mr Modukanele also said the ruling Botswana Democratic Party had been driving prudent management of resources for years.

Mr Yandani Boko of Mahalapye East said the funds should be used for the benefit of the country and not for the interest of the ruling party.

He said some of the country’s funds went into wastage and called on government to close the loopholes.

Lentsweletau-Mmopane MP, Ms Nnaniki Makwinja, also supported the bill, saying it would result in the implementation of projects which would create jobs and develop the country.

She said the purpose of the loan sought was clear. Ends