Government’s contingent liability under the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS) stands at an estimated P2 billion, roughly one per cent of Gross Domestic Product (GDP), as of December 2025, Minister of Finance, Mr Ndaba Gaolathe informed Parliament on Thursday.

Answering a parliamentary question, Minister Gaolathe emphasised that such an exposure was material to ongoing fiscal consolidation efforts and competing national development priorities and required prudent management to safeguard macroeconomic stability.

The minister was providing a comprehensive update following the scheme’s recent temporary suspension in response to questions raised by Member of Parliament for Kanye, Mr Victor Phologolo.

Mr Gaolathe said to manage such liabilities, government had signed new Guarantee Agreements with four participating financial institutions. 

He added that while overall terms and conditions remained broadly unchanged, a revised interest-rate framework had been introduced. 

He indicated that under the new terms, interest was payable at the participating bank’s prime lending rate plus 4.25 per cent in the first year, plus 5.25 per cent in the second year as well as plus 6.25 per cent from the third year onward for the remainder of the loan term.

Again, he said because participating banks set different prime lending rates in compliance with Bank of Botswana guidelines, effective GEMVAS interest rates currently ranged between 11.01 per cent and 12.26 pr cent. 

Despite a slight increase in borrowing costs due to the adjusted margins, Mr Gaolathe noted that rates remained the most competitive in the market.

On one hand, the minister assured lawmakers that there were no changes to eligibility criteria or repayment structures and the scheme remained fully accessible to qualifying public officers.

Regarding concerns regarding administrative delays, Mr Gaolathe revealed that since GEMVAS re-opened on June 15 this year, 40 new applications have been received and processed, adding that before the suspension, the scheme averaged 50 new monthly applications.

With applications assessed for eligibility and completeness immediately upon receipt and finalised within three working days, the minister confirmed there was no backlog or pending queue requiring a separate clearance plan.

Meanwhile, established in 1988 under Section 7 of the Public Service General Orders and revised in 1996, General Order 124.1 enables eligible public officers to access government-guaranteed advances from approved financial institutions strictly for residential property acquisition, construction or improvement, as well as non-commercial motor vehicles. ENDS