Gov’t debt burden climbs to P10bn

The higher bill, insiders say, is due both to government’s deepening credit appetite since COVID-19 arrived and upset the budget, as well as rising interest costs incurred when the local market prices in higher inflation and a sovereign credit downgrade.

After the pandemic hit in March 2020, government largely funded the budget gap through drawdowns from its reserves, leaving them at an all-time low of about P3.4 billion in December 2020. From September of that year Parliament authorised the doubling of the domestic debt ceiling to P30 billion, while government’s agent in the capital market, the Bank of Botswana (BoB), introduced monthly bids for debt, in order to cover the widening budget deficits.