If Botswana government were to experience a serious financial crisis, would local banks survive? This is the question will be keeping a number of local bankers awake at night, following a warning by international risk analysts, that government debt problem is increasingly becoming a bank problem.
Finance Minister Ndaba Gaolathe’s growing reliance on commercial banks to finance government’s widening fiscal gap is raising concerns that a severe deterioration in Botswana’s public finances could eventually spill over into the banking sector, exposing lenders to losses and threatening financial stability.
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