Gaborone – Botswana has secured US$250 million from the World Bank to help finance its Economic Recovery and Transformation Plan (ERTP).
The ERTP is aimed at supporting restoration of economic activity and shoring up incomes, accelerating economic transformation and building resilience, among other key objectives.
According to the World Bank, the Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) will strengthen COVID-19 relief and bolster the economy’s capacity to absorb future shocks.
The DPL will also support reforms to strengthen private sector development and promote green recovery. It is the first-ever World Bank budget support operation for Botswana and the first of two planned operations.
According to World Bank Country Director for Eswatini, Botswana, Lesotho, Namibia and South Africa, Ms Marie Francoise Marie-Nelly, “This operation also support reforms to attract private sector investments, contribute to diversification of exports and increase job opportunities towards a green economy.”
The programme will help Botswana build the foundations for sustainable, green growth by supporting reforms to increase production and regulating rooftop solar energy generation and embedding climate change considerations in environmental assessments.
The World Bank’s DPLs are deployed to support countries’ policy and institutional reform agendas to accelerate inclusive growth and poverty reduction.
“The COVID-19 pandemic led to a real gross domestic product contraction of 7.9 percent in Botswana in 2020 – the largest in the country’s history. This has also led to a depletion of existing fiscal buffers and has constrained revenue collection, reduced Government’s capacity and resources needed to accelerate the implementation of structural reforms and threatened to reverse progress in poverty reduction,” the bank said.
Botswana’s Secretary for Finance and Economic Development, Dr Alfred Mandlebe, said the government’s fiscal strategy included increasing domestic revenue mobilisation through adjustments in tax rates, fees and other charges.
He said the government would combine domestic and external borrowing to fund the financing gap for its ERTP.