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Gov’t spent P108 bn financing infrastructure since 2012

Minister of Finance, Peggy Serame

Minister of Finance, Peggy Serame, has said Government has traditionally financed almost all public infrastructure projects from its own resources, indicating that the time has arrived to explore funding alternatives such as  Public-Private Partnerships (PPP).

Officiating at the Project Financing Conference this week in Gaborone, organized by Ministry of Finance and World Bank, Serame indicated that over the past ten years, from 2012/13 to 2021/22, development spending on public infrastructure projects totalled approximately P108 billion.

She said of the P108 billion spent on public infrastructure, only an estimated P3.6 billion, or some 3.3 percent was financed by project loans, with another P1.4 billion financed by donors, meaning that more than 95 percent was financed directly by Government from the budget.

The Minister decried that Government revenues are declining, as a share of Gross Domestic Product (GDP), as the diamond industry matures and costs of production increase, while the recurrent budget is continually increasing. The balance of Government savings, held in the Government Investment Account, is declining.

“The account fell to about P6 billion at the end of 2021, from over P18 billion before the Covid-19 outbreak,” said Serame. She advised that the current environment necessitates drastic change with regard to the model adopted in procuring and financing infrastructure projects, hence Government’s commitment to exploring new project financing options aimed at closing the infrastructure financing gap.

“Under this heading, the private sector and Government work together to finance, construct, deliver and operate projects that fall under the conventional heading of public infrastructure and associated services. This can encompass a range of initiatives from simple to more complex ones,” said Serame.

She further stated that the simplest initiative could be whereby Government uses the private sector for project loans, or issues specialized bonds, such as Green Bonds or Infrastructure Bonds.
World Bank Group, Country Director, Marie Francoise Marie-Nelly said that; “The PPP project is particularly relevant at this time when Botswana, alongside other economies globally, is working hard to recover and rebound from the lingering aftermath of the Covid-19 pandemic as well as the closely intertwined impacts of the conflict in Eastern Europe on global supply chains, inflation, currency devaluation and increasing energy and food prices, among others.”

Furthermore, Marie-Nelly said the World Bank remain committed to supporting clients in green, inclusive and resilient infrastructure investment and financing, as they navigate an uncertain future, underpinned by tightening of credit supply alongside evolving user demands and requirements.

“To manage this conundrum and in the face of dwindling fiscal space, a step change is required, to mobilize more private capital for investment in quality infrastructure that facilitates achievement of multiple economic and social goals,” said  Marie-Nelly.

By way of quick reflection on the tight financing landscape, World Bank data shows that, globally, infrastructure financing declined by 52 percent, hitting 45 billion US dollars in 2020, but is gradually rebounding, as evidenced by a 49 percent increase in 2021. Africa’s infrastructure funding gap remains large, being estimated at 68 to 108 billion US dollars a year, on average.

“Therefore the World Bank, together with our sister institutions, IFC and MIGA, look forward to engaging in robust discussions with our development partners present here, together with private sector counterparts and representatives of the Government of Botswana on how, as the country moves forward with its post-pandemic and global economic challenge recovery strategy,” said Marie-Nelly.

She said World Bank can make finance work for Botswana’s infrastructure development to accelerate economic recovery, create jobs and stimulate broad-based economic development and human advancement.

 

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The Minister of Justice, Machana Shamukuni says the search to appoint the Ombudsman and other critical heads of department is currently ongoing and the process is expected to be completed before end of the year.

The Ombudsman position fell vacant almost five months ago after Augustine Makgonatsotlhe was removed from the office and appointed as Ambassador to Kuwait.

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Two Batswana detained in Zim for illegal trade in mercury

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This publication understands that the suspects who are aged between 39 and 56 years hail from Tutume and Selebi-Phikwe. At the time of the arrest, they were found in possession of a pistol, bomb motor and four live rounds. It is understood that the suspects told investigators during interrogation that the deadly substance has a lucrative market in Far East countries, where the demand is high. It is further reported that the suspects claimed that the mercury can be easily accessed in mines through middleman.

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No end in sight for Botswana/ Namibia looming border row

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The Namibian Lives Matter Movement has weighed in on the looming border dispute between their country and Botswana.

Commenting on reports that the Namibian Parliament has dispatched a committee along the border between the two countries on fact finding mission, the group commended“the National Assembly’s Standing Committee on Foreign Affairs, De-fence and Security that will engage community members living along the Namibia Botswana Border in conducting public hearings into acts of aggression and brutality by Botswana Defence (BDF) Force against innocent and unarmed Namibians.” 

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