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IMF urges Botswana to raise borrowing limits

Decisions: Finance Minister, Ndaba Gaolathe, is balancing the need for more debt with the risks of a spiral PIC: PHATSIMO KAPENG
Decisions: Finance Minister, Ndaba Gaolathe, is balancing the need for more debt with the risks of a spiral PIC: PHATSIMO KAPENG

The International Monetary Fund (IMF) is encouraging Botswana to raise its public debt ceiling to 50% of GDP, from 40% as a way of gradually easing out of the ongoing fiscal crunch.

The IMF however also emphasised the need to keep an eye on spiralling debt, with government's debt pile having grown from P48 billion in 2021 to an estimated P74 billion at the last count. The major factors have been the rolling budget deficits dating back to 2016–2017, COVID-19 and the more recent diamond downturn.

The IMF, which recently published the findings of its annual economic bilateral engagement with the government, known as the Article IV mission, recommended the expansion of borrowing limits for the country, as the country’s financing needs continue to outstrip capital supply through conventional revenue channels.

Editor's Comment
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