{"id":82616,"date":"2026-04-01T10:43:42","date_gmt":"2026-04-01T10:43:42","guid":{"rendered":"https:\/\/www.africa-press.net\/botswana\/all-news\/loan-to-secure-delivery-of-essential-public-services"},"modified":"2026-04-01T12:27:17","modified_gmt":"2026-04-01T12:27:17","slug":"loan-to-secure-delivery-of-essential-public-services","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/botswana\/all-news\/loan-to-secure-delivery-of-essential-public-services","title":{"rendered":"Loan to Secure Delivery of Essential Public Services"},"content":{"rendered":"

Africa-Press – Botswana. <\/strong> <\/span>Vice President and Minister of Finance, Mr Ndaba Gaolathe, has tabled the Standard Chartered Bank Botswana Limited Loan Authorisation Bill No. 7 of 2026) in Parliament, seeking a P750 million facility to secure the continued delivery of essential public services.<\/b><\/p>\n

Presenting the Bill recently, Minister Gaolathe emphasised that the loan was a temporary bridge designed to address immediate liquidity challenges and ensure that government obligations, including civil servant salaries and critical infrastructure projects, remained uninterrupted amid a constrained fiscal environment.<\/p>\n

He said the P750 million facility had been contracted to finance critical budget and related expenditure, including eligible infrastructure projects, as well as to support the financing of fiscal deficits arising from approved budgetary allocations.<\/p>\n

\u201cIn my previous addresses to Parliament, I have indicated that the Ministry of Finance undertakes cash management on a daily basis. This involves closely monitoring the balances in the Government Investment Account (GIA) and making difficult decisions on which obligations can be met at any given time,\u201d he said.<\/p>\n

He explained that the resources would go directly towards sustaining the functioning of government and honouring existing commitments made to the nation.<\/p>\n

\u201cThis is about ensuring that the essential services upon which citizens rely are not disrupted,\u201d he said.<\/p>\n

He described the process as more than a routine administrative exercise, but rather a constant balancing act where priorities must be set under constrained conditions. Mr Gaolathe noted that SACU revenues, now the country\u2019s largest source of income, were received only on a quarterly basis.<\/p>\n

\u201cThis means that in between these inflows, government obligations continue to accumulate. Suppliers must be paid, services must be delivered and commitments must be honoured,\u201d he explained.<\/p>\n

However, he said when SACU revenues were eventually received, they often fell short of the total accumulated obligations.<\/p>\n

\u201cThis recurring cycle places strain not only on government operations but also on businesses and citizens who depend on timely payments. It is precisely this reality that necessitates interventions such as the loan facility being sought,\u201d he said.<\/p>\n

He added that the facility provided the breathing space the country urgently needed to keep government functioning while continuing to work towards restoring fiscal stability and economic recovery.<\/p>\n

The minister said the financing arrangement, also from Standard Chartered Bank Botswana Limited, amounts to P750 million, with key terms including a fixed interest rate of 10.7 per cent, a tenure of five years with a 2.5-year grace period, an upfront fee of 1.5 per cent and an interest rate ratchet of 0.5 per cent.<\/p>\n

He further said the ministry found the terms reasonable and aligned with current market conditions.<\/p>\n

He highlighted the ratchet provision, which linked the cost of the loan to the country\u2019s credit ratings.<\/p>\n

\u201cShould the country experience a downgrade, the interest rate would increase by 0.5 percentage points. Conversely, if the country\u2019s credit rating improves, the interest rate would decrease by 0.5 percentage points,\u201d he explained.<\/p>\n

He said such a feature created direct incentive for maintaining sound economic management, as improvements in the country\u2019s fiscal position and credit rating will translate into lower borrowing costs for government.<\/p>\n

Mr Gaolathe emphasised that it had never been government\u2019s intention to continuously rely on borrowing.<\/p>\n

He said the clear and deliberate strategy was to pursue fiscal consolidation with the objective of reducing the structural budget deficit over time.<\/p>\n

\u201cBorrowing is not our destination, but a temporary bridge,\u201d he stated, adding that the focus remained on restoring balance to the fiscus, strengthening revenue performance and ensuring that future financing was directed primarily toward productive investment and critical infrastructure projects that drove growth and supported economic diversification.<\/p>\n

\u201cThis is about moving the country from survival to sustainability and ultimately prosperity,\u201dhe said.<\/p>\n

Debating the Bill, Nkange MP, Mr Motlhaleemang Moalosi said he was not opposed to it, but was worried that government was not doing enough to collect revenue.<\/p>\n

Mr Moalosi pointed out gaps in revenue collection efforts, noting that many retail giants still did not provide swiping machines, raising questions about whether they were paying the required taxes.<\/p>\n

He urged the minister to hold the Botswana Unified Revenue Service (BURS) accountable and ensure that it fully executed its mandate.<\/p>\n

He cited Ghana, where every business, from micro enterprises to large corporations, paid taxes, with officials conducting regular compliance checks from shop to shop.<\/p>\n

Mr Moalosi further argued that the leakage in tax collection needed to be tightened to ensure that more money circulated within the country\u2019s economy.<\/p>\n

He also expressed concern over government\u2019s proposal for additional programmes such as the revised Ipelegeng, which he argued would require more funding at a time when the country faced serious financial challenges.<\/p>\n

He warned that such programmes could be stalled if the economy did not recover as expected.<\/p>\n

Find more news and analyses on Botswana<\/span> on the Africa Press<\/span> website<\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Botswana. Vice President and Minister of Finance, Mr Ndaba Gaolathe, has tabled the Standard Chartered Bank Botswana Limited Loan Authorisation Bill No. 7 of 2026) in Parliament, seeking a P750 million facility to secure the continued delivery of essential public services. Presenting the Bill recently, Minister Gaolathe emphasised that the loan was a […]<\/p>\n","protected":false},"author":84,"featured_media":82615,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,12],"tags":[234],"class_list":["post-82616","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-policy","tag-botswana"],"yoast_head":"\nLoan to Secure Delivery of Essential Public Services - Botswana<\/title>\n<meta name=\"description\" content=\"-article-header-tag"> Africa-Press - Botswana. 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