Botswana debt burden to IFIs over P13bn

Nicholas Mokwena - BG reporter
Tuesday, 26 June 2018
Botswana debt burden to IFIs over P13bn

Botswana Government owes nine (9) regional and international financial institutions over P13 billion in loans. As of end of March 2018, the nine (9) institutions according to Minister of Finance and Economic Development Kenneth Matambo are African Development Bank (AfDB), African Development Fund (ADF), Arab Bank for Economic Development in Africa (BADEA), European Investment Bank (EIB), International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), Nordic Investment Bank (NIB), Organisation of the Petroleum Exporting Countries (OPEC) and International Fund for Agricultural Development (IFAD).

According to the minister the financial institution which is owed a lot of money is AfDB. “There are three loans owed AfDB with original loan amounts totaling P16.67 billion. The three loans are subject to an interest of six (6) months London Interbank Offered Rate (LIBOR) plus 0.40 percent, five (5) years grace period and fifteen (15) years’ repayment period. “The payments are made semi-annually and the outstanding balance totals P11. 73billion. IBRD is owed three loans with original loan amounts totaling P3.550 billion. The loans are subject to an interest rate of 6 months LIBOR plus 0.40 percent. Grace period ranges from between five and ten years while repayment period ranges between 18 and 25 years. The debt outstanding amounts to P1.64 billion,” said the minister.

The AfDB loans were used for Morupule B, Pandamantenga Agricultural Infrastructure Development project (still ongoing) and Economic Diversification Budget support. Matambo said the ADF is owed twelve loans with original loan amounts of P978.49 million. All loans, Matambo said, are subject to a fee of 0.75 percent, ten years’ grace period, forty years’ repayment period and the outstanding balances are at P539.27 million. He pointed out that BADEA is owed three loans. The original loans contracted amount to P266.92 million and all loans are subject to an interest charge of three percent, five years grace period and fifteen years repayment period, said the minister adding that the outstanding balances amount to P169.86 million. “There are four loans with EIB and the original amounts contracted total P107.24 million. The loans are subject to a fee of 0.75 percent, ten years’ grace period and 30 years repayment period. The outstanding balances total P41.15 million.

IDA has five loans still owed. The original amounts totaled P115.82 million and are subject to a fee of 0.75 percent, ten years’ grace period and 40 years’ repayment period. The balance outstanding amounts to P13.88 million. NIB is owed five loans with original loan amounts totaling P910.66 million. The loans are subject to a fee of 0.75 percent and grace period ranges between five and ten years while repayment period ranges between ten and 30 years. The debt outstanding amounts to P423.12 million,” the minister told Parliament this week.

Matambo revealed that OPEC is owed four loans with the original loan amounts totaling P768.26 million. One loan Matambo stated, is subject to an interest of rate of six months LIBOR plus 0.40 percent. The other three loans are subject to interest rates ranging between 3.75 and 5.2 percent. All the loans according to the minister have five years grace period and fifteen years repayment period. The balance still outstanding amounts to P168.34 million.

He noted that IFAD is owed one loan with original loan amount of P24.79 million. The loan is subject to an interest of six months LIBOR plus 0.40 percent, five years grace period and fifteen years repayment period. Matambo indicated that balance outstanding amounts to P5.62 million. The minister was responding to a question from Member of Parliament for Selibe Phikwe West Dithapelo Keorapetse who wanted to know the number of regional and international financial institutions owed by government and the amounts owed.

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