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Country Report Botswana March 2011
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HTMLEconomic policy: External debt approaches its statutory limit
Regarding government debt, external borrowing (including government-guaranteed debt) is expected soon to reach the statutory ceiling of 20% of GDP, meaning that additional borrowing will target the domestic market. For this purpose, parliament subsequently approved an increase in the government's domestic bond issuance programme by P10bn (US$1.4bn) to P15bn. This is more than sufficient to cover the envisaged deficits, and there is also scope for drawing further on government deposits at the Bank of Botswana (the central bank). As well as additional borrowing, Mr Matambo indicated that there would be an increased emphasis on opportunities for public-private partnerships to fund investments and that there were also plans to resuscitate the flagging privatisation programme.
| Government debt | ||||
| (end-Mar) | ||||
| 2010a | 2011b | |||
| P bn | % of GDP | P bn | % of GDP | |
| External liabilities | 11.0 | 12.5% | 19.4 | 19.1% |
| External debt | 9.3 | 10.6% | 16.5 | 16.3% |
| Contingent liabilities | 1.7 | 1.9% | 2.9 | 2.8% |
| Domestic liabilities | 6.0 | 6.8% | 6.5 | 6.4% |
| Domestic debt | 4.6 | 5.3% | 5.1 | 5.1% |
| Contingent liabilities | 1.3 | 1.5% | 1.3 | 1.3% |
| Total debt & contingent liabilities | 17.0 | 19.3% | 25.9 | 25.5% |
| a Actual; b Estimates. | ||||
| Sources: Ministry of Finance and Development Planning; Economist Intelligence Unit. | ||||
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