Govt borrowing 'still within limits'

Staff Writer | Wednesday July 7, 2010 00:00

Answering a Parliamentary question on Monday, Charles Tibone said at present, government's external debts comprised P10.5 billion owed to the African Development Bank and P1.2 billion owed to the World Bank's International Bank for Reconstruction and Development (IBRD).

The African Development Bank loans are for budgetary support and the Pandamatenga Agricultural Infrastructure project.

Apart from these, government issued bonds and treasury bills valued at P2.6 billion during the 2009/10 financial year.

Tibone said the figures translated to within statutory limit borrowings. 'The external debt outstanding, including guarantees, as at end of 2009/10 was 11.49 percent of GDP, while the outstanding debt under domestic borrowing, including guarantees was 5.16 percent of GDP. These are within the set limits,' he said.According to the Stock, Bonds and Treasury Bill Act, total domestic and government guaranteed debt cannot exceed 20 percent of annual GDP, which percentage also applies separately to total foreign debt and government-guaranteed debt.

Tibone noted that government has not borrowed by means of an overdraft or advance from any bank or public institution, which it is entitled to do under law.

Through the Finance and Audit Act, government may borrow through overdrafts or advances from any bank or public institution, as long as this debt does not exceed five percent of the total revenue credited to the Consolidated Fund in the previous financial year.The Consolidated Fund consists of all Government of Botswana revenues or money raised, excluding that statutorily payable to other specific funds or that which certain departments are entitled to retain.

The Assistant Finance Minister revealed that in the 2008/2009 financial year, P29.9 billion was credited into the Consolidated Fund as revenue.

Kgatleng East legislator, Isaac Mabiletsa had asked Tibone to provide a breakdown of government's debt indicating whether this complied with the statutory caps. He had also asked how much had been credited into the Consolidated Fund in 2008/09.