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The Board of Directors of the African Development Bank Group (AfDB) has approved a $137 million loan to support Botswana’s economic recovery from the Covid-19 pandemic.
The funding is provided by the Bank Group through its Botswana Economic Recovery Support Program and will be used to implement multi-sector reforms which will increase efficiency, bring jobs and stimulate inclusive growth.
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; 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.
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“The African Development Bank is providing support for reforms to enhance private sector-led agriculture and transformation of the industrial sector,” said Leila Mokadem, Director General of the Southern Africa Regional Development and Business Delivery Office. “Agriculture value addition can serve as a springboard for industrialization and job creation.”
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 a 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.
The Bank Group’s active portfolio in Botswana amounts to UA 57.7 million ($81.9 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%).
