AfDB approves $304m loan to Botswana :: Mmegi Online

The African Development Bank (AfDB) has approved a $304 million loan to Botswana aimed at addressing the country's growing fiscal pressures and accelerating critical governance and economic reforms.

Announced on Wednesday, the funding will support the Governance and Economic Resilience Support Programme (GERSP), a one-year general budget support operation for the 2025–2026 fiscal year. The initiative comes at a time when Botswana faces significant economic challenges, including declining diamond revenues and widening budget deficits.

Botswana’s economy contracted by 1.7 percent in 2024, largely due to weak global demand for diamonds, which make up around 80% of its export earnings. Consequently, the country’s fiscal position has deteriorated sharply, moving from a balanced budget in 2022–2023 to a 4.7 percent deficit in 2023–2024, with projections indicating a 6.7 percent deficit in the current financial year.

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