• From tenderpreneurship to true entrepreneurshipJune 27, 2025
    BAKANG PHUTHEGO BUSINESS WITH BK RelatedPosts From tenderpreneurship to true entrepreneurship Digital Public Infrastructure as a Strategic Imperative Be a problem solver – Tips from tech-preneur Mothooagae   In the early years after independence, Botswana stood out as a… Read more: From tenderpreneurship to true entrepreneurship
  • Digital Public Infrastructure as a Strategic ImperativeJune 27, 2025
        RelatedPosts From tenderpreneurship to true entrepreneurship Digital Public Infrastructure as a Strategic Imperative Be a problem solver – Tips from tech-preneur Mothooagae Dr Dimakatso Polokelo  Digital public infrastructure (DPI) is emerging as a core component of socio-economic… Read more: Digital Public Infrastructure as a Strategic Imperative
  • ILLEGAL WILDLIFE TRADE RISINGJune 25, 2025
    SOLOMON TJINYEKA editors@thepatriot.co.bw RelatedPosts ILLEGAL WILDLIFE TRADE RISING Be a problem solver – Tips from tech-preneur Mothooagae UDC impress BagaMmangwato   Illegal wildlife trade is escalating in northern Botswana, specifically in the pristine Okavango Delta, following a gruesome discovery… Read more: ILLEGAL WILDLIFE TRADE RISING
  • Be a problem solver – Tips from tech-preneur MothooagaeJune 25, 2025
    STAFF WRITER editors@thepatriot.co.bw RelatedPosts From tenderpreneurship to true entrepreneurship Digital Public Infrastructure as a Strategic Imperative ILLEGAL WILDLIFE TRADE RISING Local techpreneur Ogone Mothooagae has urged upcoming entrepreneurs to focus on identifying a problem that urgently needs to be… Read more: Be a problem solver – Tips from tech-preneur Mothooagae
  • UDC impress BagaMmangwatoJune 24, 2025
    Kgosi Khama happy over regaining control of Serowe kgotla Bangwato curiously await BDP apology from Balopi BAKANG TIRO editors@thepatriot.co.bw RelatedPosts ILLEGAL WILDLIFE TRADE RISING Be a problem solver – Tips from tech-preneur Mothooagae UDC impress BagaMmangwato   Residents of… Read more: UDC impress BagaMmangwato
  • Home
  • News
  • Business
  • Lifestyle
  • Sport
  • Analysis & Opinions
  • Vacancies & Tenders
  • Login
  • Register
Sunday, June 29, 2025
17 °c
Gaborone
21 ° Tue
22 ° Wed
24 ° Thu
26 ° Fri
The Patriot On Sunday
Subscribe
Advertisement
  • Home
  • News
  • Business
  • Lifestyle
  • Sport
  • Analysis & Opinions
  • Vacancies & Tenders
No Result
View All Result
Cart / $0.00

No products in the cart.

  • Home
  • News
  • Business
  • Lifestyle
  • Sport
  • Analysis & Opinions
  • Vacancies & Tenders
No Result
View All Result
The Patriot On Sunday
No Result
View All Result
Home Business

COVID-19 deepens Botswana’s public debt

patriot by patriot
October 7, 2021
in Business
237
0
491
SHARES
1.4k
VIEWS
ShareShareShare

Debt to finance 2020’s P18.3 billion deficit

COVID-19 pandemic chokes export receipts

RelatedPosts

From tenderpreneurship to true entrepreneurship

Digital Public Infrastructure as a Strategic Imperative

Be a problem solver – Tips from tech-preneur Mothooagae

But Botswana’s debt far below 60% of GDP

BAKANG TIRO

editors@thepatriot.co.bw

Bank of Botswana’s (BoB) latest special research bulletin researchers – Baby Mogapi and Karabo Badirwang – said Botswana’s public debt will rise owing to Covid-19 pressure.

The two made the projections in the research topic titled “An Assessment of External Sector Developments in Botswana and Policy Implications’’ which covered public debt, among others.

According to Mogapi and Badirwang, given the adverse impact of Covid-19 containment measures on economic activity generally, and more specifically on exports receipts, public debt is expected to increase considerably to finance current account deficit, which stood at P18.3 billion in 2020.

Notwithstanding the increase in public debt, Botswana has maintained a low and sustainable public debt during the period under review, averaging 16.5 percent during 2004/2005 to 2018/2020.

“The total public debt has been below the maximum statutory threshold of 40 percent of GDP, which comprises 20 percent ceilings for external and 20 percent for domestic debt, including debt guarantees. Total debt has also remained far below the set threshold of 60 percent of GDP for SADC macroeconomic convergence targets,” said researchers Mogapi and Badirwang respectively.

Public debt, they said, comprises domestic and external liabilities of the public sector, which includes: the central government and its agencies, general government, a non-financial public sector, government-owned financial corporations as well as public bodies outside the central government, including both guaranteed and a non-guaranteed borrowing by the Government.

For Botswana this will, in addition to central government, include the public guaranteed loans. Mogapi and Badirwang also said between 2005/06 and 2008/09, total public debt as a percentage of GDP (debt-to-GDP ratio) averaged 6.1 percent alongside current account surpluses.

However, the duo posit that the global financial crisis of 2008 and the resulting lower demand for diamond has contributed to a decline in government mineral revenues, which is very vital.

Furthermore, the combination of sustained high level of public spending and a drastic drop in diamond revenues resulted in a sharp deterioration in both current account and fiscal deficits.

“The current account balance recorded deficits from 2009 until 2012, and along with anticipated a further decline in fiscal buffers led Government obtaining a budget support loan from the African Development Bank (AfDB). Consequently, total debt-to-GDP ratio increased to 18.7 percent in 2009/10, due to the first drawdown (of P6.7 billion out of an approved P10.4 billion) that accounted for approximately 8.8 percent of GDP.Additionally, Botswana received financing from the Chinese Government, the International Bank for Reconstruction and a Development (IBRD) from 2009, which increased total public debt to its peak of 26.4 percent in 2011,” the researchers added.

Meanwhile, the research by Mogapi and Badirwang suggest that the services account which comprise transportation, travel and other services is mainly influenced by tourist receipts in travel component.

“The balance of the travel account had been on an upward trajectory, except in 2020, where it declined from a surplus of P4.5 billion in 2019 to P1.4 billion in 2020. This  has resulted from the negative effects of the COVID-19 pandemic on the tourism industry, as evidenced by the large decline in tourist visits due to travel restrictions, which is estimated to have a reduced by 38.9 percent from 1.8 million in 2019 to 1.1 million in 2020,” they said.

Services account is part of current account alongside merchandise trade, income and current transfers.

“Consequently, exports of travel decreased significantly from P7.6 billion to P2.4 billion in the same period. Imports of travel services also registered a decline of 67.7 percent from the P3.1 billion to P1 billion, also attributable to COVID-19 related travel restrictions,” said researchers.

Foreign direct investment inflows in Botswana were largely stable during the period under review, averaging P2.2 billion annually, with the lowest level of P564 million as recorded in 2013, due to the loan repayments from the subsidiaries in Botswana to the parent companies abroad.

As the pressure mounts on the government revenue, The Minister of Finance and Economic Development Peggy Serame is hitting the ground running looking for external borrowing to finance fiscal activities.

Parliament approved a loan from World Bank with Serame explaining that government will disburse P1.1 billion from the facility to Ministry of Health and Wellness for the COVID-19 resources.

Botswana Defence Force (BDF) was given a share of P204 million to fund costs of its deployment of soldiers to Mozambique, in its mission to help the country fight insurgents at the Cabo Delgado region.

For this financial year, she said, an estimated deficit of P 6 billion or 3.0 percent of the Gross Domestic Growth (GDP) was anticipated during the presentation of the national budget in February 2021.

Related

Get real time update about this post categories directly on your device, subscribe now.

Unsubscribe
Previous Post

Stanbic launches Unayo

Next Post

A CHAMPION IN WAITING

Related Posts

From tenderpreneurship to true entrepreneurship
Business

From tenderpreneurship to true entrepreneurship

June 27, 2025
Digital Public Infrastructure as a Strategic Imperative
Business

Digital Public Infrastructure as a Strategic Imperative

June 27, 2025
Be a problem solver – Tips from tech-preneur Mothooagae
Business

Be a problem solver – Tips from tech-preneur Mothooagae

June 25, 2025
BoB warns banks
Business

BoB warns banks

June 23, 2025
BIHL blames Letshego for earnings decline
Business

BIHL blames Letshego for earnings decline

June 17, 2025
Redefining banking through innovation
Business

Redefining banking through innovation

June 16, 2025
Next Post
A CHAMPION IN WAITING

A CHAMPION IN WAITING

Please login to join discussion
  • From tenderpreneurship to true entrepreneurshipJune 27, 2025
    BAKANG PHUTHEGO BUSINESS WITH BK RelatedPosts From tenderpreneurship to true entrepreneurship Digital Public Infrastructure as a Strategic Imperative Be a problem solver – Tips from tech-preneur Mothooagae   In the early years after independence, Botswana stood out as a… Read more: From tenderpreneurship to true entrepreneurship
  • Digital Public Infrastructure as a Strategic ImperativeJune 27, 2025
        RelatedPosts From tenderpreneurship to true entrepreneurship Digital Public Infrastructure as a Strategic Imperative Be a problem solver – Tips from tech-preneur Mothooagae Dr Dimakatso Polokelo  Digital public infrastructure (DPI) is emerging as a core component of socio-economic… Read more: Digital Public Infrastructure as a Strategic Imperative
  • ILLEGAL WILDLIFE TRADE RISINGJune 25, 2025
    SOLOMON TJINYEKA editors@thepatriot.co.bw RelatedPosts ILLEGAL WILDLIFE TRADE RISING Be a problem solver – Tips from tech-preneur Mothooagae UDC impress BagaMmangwato   Illegal wildlife trade is escalating in northern Botswana, specifically in the pristine Okavango Delta, following a gruesome discovery… Read more: ILLEGAL WILDLIFE TRADE RISING
  • Be a problem solver – Tips from tech-preneur MothooagaeJune 25, 2025
    STAFF WRITER editors@thepatriot.co.bw RelatedPosts From tenderpreneurship to true entrepreneurship Digital Public Infrastructure as a Strategic Imperative ILLEGAL WILDLIFE TRADE RISING Local techpreneur Ogone Mothooagae has urged upcoming entrepreneurs to focus on identifying a problem that urgently needs to be… Read more: Be a problem solver – Tips from tech-preneur Mothooagae
  • UDC impress BagaMmangwatoJune 24, 2025
    Kgosi Khama happy over regaining control of Serowe kgotla Bangwato curiously await BDP apology from Balopi BAKANG TIRO editors@thepatriot.co.bw RelatedPosts ILLEGAL WILDLIFE TRADE RISING Be a problem solver – Tips from tech-preneur Mothooagae UDC impress BagaMmangwato   Residents of… Read more: UDC impress BagaMmangwato
The Patriot On Sunday

© 2024 Copyright The Patriot On Sunday - Inspired by Search Mart.

Navigate Site

  • About Us
  • Advertise
  • Disclaimer
  • Contact Us

Follow Us

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Login
  • Sign Up
  • Cart
  • Home
  • News
  • Business
  • Lifestyle
  • Sport
  • Analysis & Opinions
  • Vacancies & Tenders

© 2024 Copyright The Patriot On Sunday - Inspired by Search Mart.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?