Connect with us

MPs approve P2.7 billion World Bank loan


This week, Minister of Finance and Economic Development Peggy Serame sought from Parliament approval to borrow US$250 million from the International Bank for Reconstruction and Development (IBRD), a World Bank Group institution. 

Explaining the rationale behind the loan, Serame said that for this financial year, a projected deficit of P6.03 billion or 3.0 percent of GDP was expected during the presentation of budget speech in February earlier this year. However, Serame explained that figures have gone up with an estimated deficit of up to P7.75 billion or 3.6 percent of the Gross Domestic Product (GDP).

In the budget speech presented by the then Minister, Dr. Thapelo Matsheka government indicated that the financing of this anticipated deficit was going to be through a combination of domestic borrowing through the issuance of Government bonds and Treasury Bills external borrowing, mainly from the multilateral development banks.

Dr. Matsheka explained that this is because the option to draw down from the previously accumulated Government savings is no longer available. On Thursday, Serame explained that considering all these factors Ministry of Finance approached the World Bank for a budget support loan amounting to USD 250 million (approximately P2.7 billion) to finance part of the projected budget deficit, subject to approval by Parliament.

She submitted that the COVID-19 pandemic has resulted in reduced revenues and increased pressure on the expenditures, with budget deficits anticipated in the medium term. Under the Programmatic Economic Resilience and Green Recovery Development Programme, International Bank for Reconstruction and Development (IBRD) Loan Authorisation Bill, Serame threw the propositions to lawmakers.

She explained that the loan would support three objectives being; supporting COVID-19 pandemic response, strengthening private sector development, and promoting resilience of green recovery.

Serame informed Parliament that the government had finalized loan negotiations with the World Bank. The negotiated terms and conditions for the loan are a Front-end fee of 0.25 percent, which will be paid from the loan proceeds, and a commitment fee of 0.25 percent on undisbursed balances.

In addition, the conditions include a Variable reference rate of 6 months US$ LIBOR, which is currently at 0.16 percent plus a variable spread (based on World Bank funding costs, which is currently at 0.52 percent). This then results in a total interest rate of 0.68 percent. The loan will run for a ten-year maturity tenor inclusive of a three-year grace period.

Justifying the need for borrowing, Serame told lawmakers that in terms of Botswana’s debt legislation, which is the Stocks, Bonds and Treasury Bills Act, 2005, Cap 56:07, the requested loan will still leave the country’s external debt exposure within the statutory limits of 20 percent of GDP. External debt to GDP stands at 10.16 percent, while domestic debt is at 10.99 percent of GDP, all within the 40 percent of GDP statutory limit.


On the 11th of June this year, the World Bank, the International Bank for Reconstruction and Development (IBRD) parent company, announced that Botswana’s efforts to accelerate key economic reforms got a boost following the approval of a $250 million loan.

The Washington DC headquartered global lender explained that The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) would support Botswana’s Economic Recovery and Transformation Plan and strengthen the COVID-19 pandemic relief bolstering resilience to future shocks.

This DPL is also designed to support reforms to strengthen private sector development and promote green recovery. It is the first-ever World Bank budget support operation for Botswana and the first of two planned operations.

“The COVID-19 pandemic has placed a great burden on the country’s economy, its people, and firms. With this operation, the World Bank will support the government’s reforms to ensure social spending reaches the poorest and assists Batswana who are most affected by the Covid-19,” said World Bank Country Director for Eswatini, Botswana, Lesotho, Namibia and South Africa, Marie Francoise Marie-Nelly in June.

“This operation will also support reforms to attract private sector investments, contribute to the diversification of exports, and increase job opportunities towards a green economy,” the World Bank said.

The Bank explained that the operation provides financial and technical support for government reforms to implement a Single Social Registry and improve targeting of social spending on the most vulnerable while strengthening systems for future shocks.

It will also help strengthen the business environment for increased SME-led job creation and economic diversification through improved access to finance for individuals and small and micro enterprises (SMEs).

Furthermore, the program will help Botswana build the foundations for sustainable, “green” growth by supporting reforms to increase renewable energy production by independent power producers, promoting and regulating rooftop solar energy generation, and embedding climate change considerations in environmental assessments.

The World Bank uses dPLs to support a country’s policy and institutional reform agenda to help accelerate inclusive growth and poverty reduction. The COVID-19 pandemic led to a real gross domestic product (GDP) contraction of 7.9 percent in Botswana in 2020 – the largest in the country’s history.


Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

This content is locked

Login To Unlock The Content!

Continue Reading


African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; “Weathering the storm; African Development Banks response to Covid-19” presented shocking findings during the seminar. Among them; African DFI’s have proven to be financially resilient, and they are fast shifting to a green transition and it’s financing.

COO, CEDA, James Moribame highlighted that; “Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. “It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.”

According to Moribame, Start-up businesses will forever require help if there is no change.

“There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFI’s.”

Moribame shared remedies to the situation, noting that; “What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects. ”

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

“Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money.” He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

“The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies.” Said Gare.

Continue Reading


TotalEnergies Botswana launches Road safety campaign in Letlhakeng

22nd November 2022

Letlhakeng:TotalEnergies Botswana today launched a Road Safety Campaign as part of their annual Stakeholder Relationship Management (SRM), in partnership with Unitrans, MVA Fund, TotalEnergies Letlhakeng Filling Station and the Letlhakeng Sub District Road Safety Committee during an event held in Letlhakeng under the theme, #IamTrafficToo.

The Supplier Relationship Management initiative is an undertaking by TotalEnergies through which TotalEnergie annually explores and implements social responsibility activities in communities within which we operate, by engaging key stakeholders who are aligned with the organization’s objectives. Speaking during the launch event, TotalEnergies’ Operations and HSSEQ,   Patrick Thedi said,  “We at TotalEnergies pride ourselves in being an industrial operator with a strategy centered on respect, listening, dialogue and stakeholder involvement, and a partner in the sustainable social and economic development of its host communities and countries. We are also very fortunate to have stakeholders who are in alignment with our organizational objectives. We assess relationships with our key stakeholders to understand their concerns and expectations as well as identify priority areas for improvement to strengthen the integration of Total Energies in the community. As our organization transitions from Total to Total Energies, we are committed to exploring sustainable initiatives that will be equally indicative of our growth and this Campaign is a step in the right direction. ”

As part of this campaign roll out, stakeholders  will be refurbishing and upgrading and installing road signs around schools in the area, and generally where required. One of the objectives of the Campaign is to bring awareness and training on how to manage and share the road/parking with bulk vehicles, as the number of bulk vehicles using the Letlhakeng road to bypass Trans Kalahari increases. When welcoming guests to Letlhakeng, Kgosi Balepi said he welcomed the initiative as it will reduce the number of road incidents in the area.

Also present was District Traffic Officer ASP, Reuben Moleele,  who gave a statistical overview of accidents in the region, as well as the rest of the country. Moleele applauded TotalEnergies and partners on the Campaign, especially ahead of the festive season, a time he pointed out is always one with high road statistics. The campaign name #IamTrafficToo, is a reminder to all road users, including pedestrians that they too need to be vigilant and play their part in ensuring a reduction in road incidents.

The official proceedings of the day included a handover of reflectors and stop/Go signs to the Letlhakeng Cluster from TotalEnerigies, injury prevention from tips from MVA’s Onkabetse Petlwana, as  well as  bulk vehicle safety tips delivered from Adolf Namate of Unitrans.

TotalEnergies, which is committed to having zero carbon emissions by 2050,  has committed to rolling out the Road safety Campaign to the rest of the country in the future.

Continue Reading