Wednesday, June 12, 2024

Botswana underutilising its massive borrowing power – MP

As the spectre of Selebi Phikwe becoming a ghost town looms larger than ever before, the government is not exercising an option that can save not just the copper-mining town but an entire region that depends on this town.
In sharing his appreciation of the draft NDP 11 with Sunday Standard, the Gaborone Bonnington South MP, Ndaba Gaolathe, has faulted the Botswana government for sitting on an financial advantage that it can use to solve some of the pressing economic problems that the country faces.
“Botswana has substantial capital resources, including pension resources which are the size of our entire formal banking sector. The government also has significant borrowing power which, to date, has not been put to bear notwithstanding that this may be viewed positively as a sign of prudence,” the MP said.
An upper middle-income country with vast amounts of foreign reserves and underinvested national pension resources, Botswana has, over the years, demonstrated very little appetite for borrowing. When the global financial crisis hit, diamond prices plummeted and the country’s finances were badly affected. In 2010, the government did, for the first time in 17 years, borrow a large sum (P10.5 billion) for budgetary support. The loan covered the larger part of the P13.4 billion deficit the government had incurred in its 2009/10 national budget, with the remainder of the deficit being covered by a P2.2 billion loan that the country got from the World Bank through the African Development Bank’s Development Policy Lending window. The latter is a fast-disbursing facility intended to assist countries in economic crisis. For the AfDB, this was a development so welcome that its former president, Donald Kaberuka, came to Gaborone for the signing ceremony.
Gaolathe lamented that the Botswana government has not done enough to mobilize resources at its disposal to create a world-class infrastructure or co-invest in transformative flagship projects of businesses that can change the country’s economic landscape. 
“The NDP 11 does not even provide a proper matrix of sources of funding (government and estimated private sector funding) for any major flagship projects. The path for developing the railways to the coasts, the dual carriageway running from south to north, high-speed broadband, infrastructure for agriculture, the BCL copper-nickel revival and other key infrastructure is not there, or clear or bold enough, nor is it integrated or well thought through. We need to be bolder and more organized in building a world-class infrastructure without which we cannot achieve any serious aspirations,” Gaolathe said.
In its 2014 election manifesto, the opposition Umbrella for Democratic Change which Gaolathe is Deputy President of, proposed massive infrastructural projects.


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