Afreximbank, gov’t advance talks on $1.5bn package
Mbongeni Mguni | Monday March 30, 2026 09:56
The Cairo-headquartered supranational, of which Botswana is a member, offered the three-year country programme in 2022, but talks eventually broke down, reportedly over terms. In 2024, the bank, with assets approaching $45 billion, said it was still open to further discussions with Botswana.
In the last fortnight, Afreximbank senior officials were in the country to progress dialogue on different forms of cooperation, BusinessWeek has established.
Humphrey Nwugo, regional director for Afreximbank Southern Africa, said the Memorandum of Understanding giving effect to the country programme had officially been executed by Botswana Vice President and Minister of Finance, Ndaba Gaolathe, recently.
“The Afreximbank team visiting Botswana last week, which I was part of, had the honour of meeting with the Vice President to discuss, amongst other things, how Afreximbank can support the country through the current economic situation,” Nwugo said in an emailed response to BusinessWeek enquiries. “We also discussed potential support for the projects identified in the current year’s budget and are now exploring these.”
The bank executive said the two sides were now moving towards the implementation of the key elements of the MoU.
“The country programme amount indicates a wallet which Afreximbank pre-approves to enable us to intervene in certain member countries in a programmatic fashion. “What this means is that funding is only made available on a project-by-project basis and not to the treasury for budget support. “The implementation phase of this programme now means jointly identifying the critical sectors or transactions, or projects that can be financed under the programme. “So, we are confident that very soon our footprint in Botswana will grow exponentially,” he said.
Whilst Botswana belongs to several supranationals from where it can tap funding to support weak revenues, technocrats have traditionally been reluctant to access these sources as they represent hard currency debt that carries a foreign exchange risk for an economy largely dependent on a few export commodities.
Negotiators in the supranationals have previously pointed out that whilst political leadership appears open to engaging on funding packages, the conclusion of these frequently gets bogged down by wary technocrats who are eager to protect the country against foreign currency debt risks.
Nwugo said Afreximbank was widely recognised as a counter-cyclical institution because its intervention and impact are mostly felt, especially during challenging times such as what many African countries are facing now. One such example is the billions of dollars deployed by Afreximbank during COVID-19, where it facilitated the emergency procurement of vaccines for African and Caribbean countries on a pooled procurement basis, even with raging issues of global vaccine inequity.
Nwugo said government’s plan to fast-track its call and drive for economic diversification and private sector-led growth was quite laudable, and the Bank could see tangible action.
“One such example is the Botswana Economic Transformation Programme (BETP), which is housing, incubating and developing transformative projects carefully selected by experts based on viability and impact,” he said. “We are in constant discussions with stakeholders in the Ministry of Finance to identify the projects that align with our mandate, and this will greatly help the government navigate current times.”
The Finance Ministry has projected the 2026-27 budget deficit to reach nine percent of the Gross Domestic Product (GDP), while plans are underway to raise the borrowing limit from 40% of GDP to 60%.
The country’s fiscal troubles are due to a decade-long decline in mineral revenues, worsened by COVID-19 and the sharper drop in diamond earnings since 2023 due to the explosion of synthetics and global uncertainties.
Gaolathe has responded by tightening public finance efficiencies, mobilising more domestic resources and taking on more debt for short to medium term stability, whilst focusing on the BETP to deliver transformational growth over the next decade.