Friday, October 23, 2020

Botswana gets World Bank loan in 20 years

The European Union (EU) has helped the Botswana government to secure a loan from the World Bank that will help the country beef up its war chest against the Aids pandemic that has taken the lives of thousands of productive labour.

The P400 million loan, payable in 25 years, is the first loan the government secured from the international lender since the country graduated from a poor country to a middle income status.
“We look forward to speedy implementation of the project, so that the benefits can touch the lives of common people who are suffering from the adverse effects of the disease,” said Paul Malin, Head of Delegation of the European Commission to Botswana and SADC.┬á

Botswana Finance Minister Baledzi Gaolathe promised that because of the monitoring from donors, the government will improve monitoring on the government.

“It is in the best interest of government to ensure that targets are duly met without fail. Otherwise it will be difficult to convince our partners to proceed with the “buy down” facility,” the minister said.
Of all the total loan secured under the an IBRD buy-down loan facility, the EU softened the loan with P160 million. The facility has so far been used in China.

Botswana’s status as a middle income country precludes it from receiving concessional financing from the World Bank, hence the need for a financing instrument specifically tailored to the country’s needs.┬á

The buy down loan facility involves merging the loan with donor grant resources like the one from EU to lower the cost of the loan. The funds will have the financial impact of reducing the interest rate effectively to 0% and also contribute towards repaying the principal payment.

Observers applauded the EU for the helping hand, especially at a time when the global recession is hitting government revenues with major cuts expected on the budget on Monday.
It is estimated that 283,000 Batswana adults, many in their prime, are suffering from the debilitating disease. 

The EU pointed out that Botswana has notched some impressive gains in the fight against HIV/AIDS saying by the beginning in 2002, it was the first African country to provide no-cost, antiretroviral therapy to all citizens. 

By June 2008, antiretroviral coverage had expanded to an estimated 93 percent of the population. These concerted efforts, together with introduction of a routine HIV testing policy, have successfully halved the number of AIDS-related deaths. 

It said the Aids project is a good example of a country-led effort.┬á The multi-partner project steering committee is chaired by Botswana’s National AIDS Coordinating Agency (NACA), and includes representatives of the European Commission, U.S. Government, United Nations agencies, the private sector (Merck) and civil society, including the Gates Foundation, among others.┬á

The disease has exacted a heavy toll on the country with many lives lost.  Between 1991-2003 mortality rates in Botswana tripled, severely distorting the population structure.  Life expectancy has decreased to 56 years. 
“Were it not for the epidemic, the Botswana Census Bureau estimates that life expectancy would be 70 years.┬á By 2010, projections show that more than 20 percent of all children in Botswana will have lost one, or both parents, to the disease,” noted the EU.
Previously, the World Bank and government of Botswana have interacted in the analysis of the development impact of HIV/AIDS on the economy and helped in the Export Diversification Report.

It has also helped government with 2006 Report on Observance of Standards and Codes (ROSC) on Accounting & Auditing; Livestock Sector Development Strategy; and Poverty and Social Impact Analysis.
Other areas of interaction include the bank support in the Morupule Expansion project and the Mmamabula Export Power Station Project and the Integrated Transport project.

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