Govt fiscal reserves drop further
Mbongeni Mguni | Thursday January 14, 2021 14:13
The latest Bank of Botswana statements indicate that the reserves, known as the Government Investment Account (GIA), fell to about P5 billion in September then rose to P6.5 billion in October, before the drop to the P5.6 billion in November.
The GIA began the year at about P17 billion but began sliding as the COVID-19 crisis forced more drawdowns by government to support the budget.
The reserves’ weakness comes after Finance and Economic Development minister Thapelo Matsheka told Parliament recently that government would ease its drawdowns from the GIA as it had softened considerably.
The minister said government would instead look at borrowing from the local market and “domestic resource mobilisation” a term that includes tax increases and reduction of subsidies and exemptions.
Matsheka also said government had opened talks with potential external funders such as the World Bank, which recently confirmed the negotiations to Mmegi.
Recently, Matsheka noted that prior to the 2008-2009 financial crisis, the GIA stood at about P30.5 billion while before the coronavirus (COVID-19) crisis, it was at about P18.3 billion.