The central bank, Bank of Botswana (BoB), has said that as at the end of 2016/17 fiscal year, the government and government guaranteed debt was pegged at P34.8 billion.
Data contained in BoB’s Annual Report made public last week, shows that of the total P34.8 billion debt, P24.9 billion is government owned debt whilst the remaining balance is government guaranteed debt.
“Total projected debt and guarantees as at 31 March 2017 is equivalent to 22.3 percent of forecast GDP, thus remaining below the statutory ceiling of 40 percent of GDP,” explained Dr Kealeboga Masalila to financial journalists who gathered at the bank’s board room in the capital Gaborone on Wednesday.
According to Masalila, the total external debt amounts to P25.1 billion or 16.1 percent of GDP, while domestic debt and guarantees at 6.2 percent of GDP, amounts to P9.7 billion.
Economic experts have previously warned that although Botswana has not yet exceeded the global debts benchmarks, the country risks running into a debt crisis if it continues borrowing at the current pace.
Since 2008, as the economy started running into continuous deficits, treasury officials have been running around the world to secure finances to keep the economy running.
In May 2015, the Gaborone Bonnington South Member of Parliament, Ndaba Gaolathe, told Sunday Standard that in a future where government revenues dwindle, it will be absolutely necessary to amend the Stock, Bonds and Treasury Bills Act to adjust to the new reality.
“Every country that has set government borrowing ceilings in absolute terms will have to revise the ceilings periodically to adjust for and take into account changes in the size of the economy. An economy may double within a period of five, seven or 10 years and hence the same for the borrowing needs,” Gaolathe said then.
In terms of the Stock, Bonds and Treasury Bills Act, “the total foreign debt and government guaranteed debt shall not exceed 20 percent of the annual gross domestic product.”
