African Development Bank (AfDB) has approved $137million loan to support Botswana in mitigating the effects of covid-19 pandemic and also to fastrack the economic recovery of the country.
The funds, extended under the Bank Group’s Botswana Economic Recovery Support Program, will be used to enact multi-sector reforms that will increase spending efficiency, create jobs and drive inclusive growth.
The Bank Group’s active portfolio in Botswana amounts to $81.9 million (UA 57.7 million) and comprises four projects. The financial sector accounts for the largest share of the portfolio by sector (97.1%), followed by agriculture (1.7%) and industry (1.2%).
According to Leila Mokadem, Director General of the Southern Africa Regional Development and Business Delivery Office. “The African Development Bank is providing support for reforms to enhance private sector-led agriculture, and transformation of the industrial sector”, “Agriculture value addition can serve as a springboard for industrialization and job creation”.
The project has three components: enhancing domestic resource mobilization and mitigating fiscal risks to enhance macroeconomic performance and create fiscal space for spending on social safety nets; supporting private sector-led agriculture and industry to bolster productivity and value addition, and increase job opportunities; and offering business development services to micro and small enterprises to advance social protection and gender equity. The three components are expected to reinforce one another.
The project aligns with the Bank Group’s Ten-Year Strategy (2013-2022) and its High Five strategic priorities, particularly Industrialize Africa, and Improve the quality of life of the people of Africa.
Botswana is at very low risk of debt distress, and has a positive medium-term growth outlook, although a lack of economic diversification exposes the country to significant vulnerabilities.