AfDB, Morupule B debt repayments kick-in
Mbongeni Mguni | Friday February 28, 2014 15:31
The minister is also proposing P44.6 million as initial repayment of the principal for the US$136.4 million Morupule B loan received five years ago from the World Bank.
According to draft estimates of expenditure currently before legislators, the AfDB will also receive P150 million in interest repayments, while the World Bank will be paid P4.5 million as interest for its loan.
The AfDB loan, disbursed from 2009 with a five-year grace period, is scheduled to run until 2029 at an interest rate equal to the bank’s cost of funding plus 0.16 percent. The World Bank loan, meanwhile, was secured in 2009 carrying a four-year grace period and will run until 2039 at a variable spread.
The 2014/15 budget will also feature repayments of two loans that totalled US$18 million received in 2008 and 2010 from the Arab Bank for Economic Development in Africa (BADEA). The BADEA loans were for upgrading at Kasane and Sir Seretse Khama International airports.
According to the estimates, BADEA will receive a total of P13.3 million in principal repayments of the two airport loans, as well as P4.9 million in interest repayments. Of the repayments planned for 2014/15, it is expected that legislators will be riled by those due in respect of Morupule B, which is yet to be fully functional nearly one and a half years after its scheduled handover.
Several legislators have questioned the ongoing delays in bringing all of Morupule B’s four units into smooth operation, as the Botswana Power Corporation races to fully revive the station ahead of winter.
Whatever legislators’ criticisms are, the budget is traditionally passed without amendment, which the Botswana Institute for Development Policy Analysis says is due to constitutional oversights.
“One of the challenges facing parliament in its execution of the oversight function is that whereas sections 119 and 120 of the Constitution bestow on it the ability to authorise public expenditures, the same sections fail to stipulate the latitude to amend the same budget,” researchers at the public think-tank have said.
“Furthermore, as the budgets are mainly executive-led in Botswana, Parliament, like the public, only come into contact with the executive budget proposal when the Minister responsible for finance reads out the budget speech.
“This curtails the ability of members of parliament to make meaningful contribution to the budget process.”
Legislators are presently hearing the various Committee of Supply presentations by ministries, which detail their individual expenditure proposals.