By Staff Reporter |
PRETORIA – The African Development Bank Group has approved a US$503.75 million (about P6.62 billion) loan to help Botswana absorb the impact of the global energy shock and push reforms that grow the private sector and create jobs, especially for women and youth.
One of the Bank’s largest operations in the country, the financing will go through the Economic Competitiveness and Transformation Support Program (ECTSP). It backs fiscal and private sector reforms that aim to lift non-mining tax revenue to 11.8 per cent of GDP in 2027/28 and raise private investment to 30 per cent by 2028. It also expands support for micro, small and medium-sized enterprises (MSMEs).
Why the support is needed
Botswana’s economy has been squeezed by a prolonged slump in the natural diamond market. Diamonds account for about 30 per cent of GDP and nearly 80 per cent of exports, and the economy contracted by 2.8 per cent in 2024 and 0.7 per cent in 2025. The Middle East conflict has since pushed up the national energy bill. Unemployment stands at 21 per cent, rising to 28.9 per cent among young people.
“Our role is to help finance the adjustment, while protecting those least able to bear its costs,” said Moono Mupotola, the Bank’s Deputy Director General for Southern Africa and Country Manager.
Abdoulaye Coulibaly, the Bank’s Director for Governance and Economic Reforms, said the reforms are time-bound and measurable. “Adoption alone is not our goal; implementation is,” he said.
Relief for households
The programme supports the President’s 6 April 2026 directive suspending fuel, road and security-of-supply levies for six months. This limits the rise in pump prices to about P0.58 per litre and is expected to cut inflation by 1.6 percentage points, easing transport fares and food costs.
Old-age pensioners, disability grant recipients, destitute cash beneficiaries and home-based care patients are also receiving extra monthly payments for three months. The support is expected to reach about 279,000 vulnerable people.
Energy, land and jobs
- A fully costed National Electrification Action Plan will work towards universal household electricity access by 2030, up from 79.5 per cent in 2025/26.
- Botswana will hold at least one competitive renewable energy auction, inviting private developers to build new solar and wind capacity.
- The Francistown fuel depot will be expanded from 38 million to 98 million litres to strengthen fuel supply security.
- Land reform should give 4,300 more families secure titles within a year, lifting the national total from 19,682 to about 24,000 and allowing land to be used as collateral.
- The programme targets 3,292 active MSMEs and 3,935 direct jobs by 2027/28. Women-owned firms make up 93 per cent of supported enterprises.
- Full e-procurement is expected to cut procurement costs by 5 to 15 per cent.
These steps feed into the Botswana Economic Transformation Programme, a pipeline of 186 projects worth P514 billion, with a long-term goal of creating 512,000 jobs by 2036.
This is the first phase of a two-year programmatic series covering 2026/27 and 2027/28. The OPEC Fund is co-financing with US$170 million. The operation builds on 2025 Bank support, after which VAT collections rose 15.5 per cent to P14.397 billion.
Loading …
Leave a Reply