There is need for reform on how government manages and reports on its debt; both local and international.
Given Africa’s booming indebtedness, it is important for Botswana to embrace reforms that would once again see the country escape a trap that has previously been the source of so much misery for other African countries.
In the past indebtedness was averted by a clutch of initiatives implemented or happening in parallel.
First and foremost there was deliberate prudence on our leaders at the time.
The same cannot be said about Botswana’s contemporary leaders.
Then there were significantly higher revenues, primarily from diamonds that made a need for borrowing so little as to be non-existent.
Again, such revenue is no longer available.
So borrowing is a big option, hence the need for reforms.
Such reforms at central government if implemented should also cascade to government owned companies and parastatals.
After all government is more often than not the overall guarantor and underwriter of all borrowing by these agencies.
Botswana Government’s debt ceiling as a ratio of GDP is clearly legislated as a statutory instrument as contained in an act of Parliament.
As a general rule, this is good start on elementary governance.
But on its own, this instrument viewed in isolation as our political leaders, especially at the Ministry of Finance are fond of doing in efforts to hit at detractors is far from enough.
We want to admit that Botswana’s debt as a percentage of GDP remains so low as to be the envy of other nations across the world.
But as a people we can no longer trust our leaders to follow the traditions of economic prudence and good management.
Thus there is need for more transparency than is currently the case on Botswana Government’s overall indebtedness.
One way of achieving that is to publish that information regularly on publicly available platforms like the Daily News rather than on obscure technical platforms at Bank of Botswana or databases of the Ministry of finance.
One way would also be to make it a legal requirement on the part of any lender to also disclose and make public the overall details of the facility or transaction to Botswana government.
This two-pronged requirement would go a long way in allaying public fears that our leaders are engaged in a debt-spree that could end up making the country vulnerable to a debt crisis, including a debt trap.
Also as part of those reforms on disclosure should be an explicit and clear break down on domestic as opposed to international debt.
Such information is of immense importance given that the number of lenders to Botswana, as is the case with other African countries has been growing exponentially.
While in the past there were only a handful of lenders, today that number has grown to include domestic and international bond markets. Donor financiers have also been growing is their numbers.
Added to that list is China which has also been aggressively growing is lending portfolio to Africa, with Botswana among big beneficiaries.
A growth in the number of sources from which to borrow is of and by itself a good thing.
But it is not enough if it is not accompanied by robust governance and public monitoring structures, chief of which is transparency.
At the moment there is a lot of opaqueness and obscurity in financing deals reached between Botswana Government and other lenders like the World Bank, IMF, African Development Bank, Development Bank of southern Africa, etc.
Even when brought before parliament for approval, the amount of information in pertaining to payments especially on either interest or debt principal is not helpful. Such information is crafted such as to extract the rubber stamp authority from parliament by creating incentives like how much the loan is and what it will be used for.
Such information, in our view is too limited to be of much help in the instance of a public debate discourse.