Africa-Press – Botswana. Following constructive negotiations, Botswana Public Officers Pension Fund (BPOPF) has agreed to extend P3 billion loan to government.
Presenting the Botswana Public Officers Pension Fund (Loan Authorisation) Bill, 2025 (Bill No. 7 of 2025) before Parliament yesterday, Vice President also Minister of Finance, Mr Ndaba Gaolathe said the loan had a tenure of seven-year maturity inclusive of the two-year grace period, which would provide reprieve on debt service obligations and builds toward improving its liquidity position.
Mr Gaolathe said the loan would attract a fixed interest rate of 11 per cent per annum and would also have a two-year moratorium on interest. He said the board of trustees of BPOPF approved the loan facility on March 13. Furthermore, he said the form of lending was permissible under the Pension Fund Investment Rules issued under the Retirement Fund Act of 2022.
He said the borrowing by government would assist BPOPF in meeting the local investment requirement set out in the Act. As per the terms of the Loans Authorisation Act, the proceeds of the loan would be deposited into the Development Fund.
He said the bill was published in the Government Gazette on March 28 and was presented on a certificate of urgency since it had not matured but was urgently required to finance the backlog of outstanding invoices that government needed to settle.
Mr Gaolathe said the government was faced with financial challenges and due to the persistent fiscal constraints, government account was currently more or less over drawn while revenue offices across the country were experiencing operational incapacitation.
“As we close the financial year, government faces a significant backlog of outstanding invoices that must be settled,” he said.
Given the shortfall in revenue collection, Mr Gaolathe said the Ministry of Finance was compelled to explore alternative financing options to urgently bridge the gap and insure continued delivery of essential public services. He said the ministry approached BPOPF for a possible loan facility to support financing of the government budget.
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