Government reserves, which fiscal authorities traditionally dip into during times of crisis, weakened by about P2.6 billion in August, underlying the stress the Covid-19 pandemic is having on the national purse.
The funds, officially known as the Government Investment Account (GIA) which represents government’s portion of the foreign reserves, were pegged at P10.7 billion in August according to the Bank of Botswana.
By comparison, the GIA was measured at P19.5 billion in August 2019 and P28.2 billion in August 2018.
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. Recently, Matsheka noted that prior to the 2008/09 financial crisis, the GIA stood at about P30.5 billion while prior to the Covid-19 crisis, it was at about P18.3 billion.
He said the depletion of the government reserves meant that fiscal authorities would have to look elsewhere for the bulk of the P13.6 billion projected as the budget deficit for the current financial year.