Views Article – Sharenet Wealth

Africa, News

Botswana needs $3.4 billion in stimulus, to plug budget deficits

GABORONE (Reuters) – Botswana needs a total of 40 billion pula ($3.40 billion) over the next 2-1/2 years to revive its coronavirus-hit economy and to cover expected budget deficits, estimates by the ministry of finance showed on Friday.

Botswana has a relatively low number of COVID-19 infections with only three active cases remaining and one death, but the economy has been severely impacted by lockdowns to curb the outbreak with the budget deficit expected to more than double as reduced diamond sales and exports hit revenues.

“The estimated total cost of Economic Recovery and Transformation Plan (ERTP) spending is 20 billion pula over 2.5 years,” read a draft of the plan seen by Reuters.

“In addition, the anticipated budget deficit over the same period is 20 billion pula, making a total of approximately 40 billion pula to be funded,” it said.

Industries earmarked for investment include agriculture, health infrastructure, transport and the tourism sector which has ground to a halt due to global travel restrictions and a nationwide lockdown.

Funding for the economic recovery plan and the deficits is expected to be sourced mostly from domestic borrowing, drawing down on government savings, and taxes.

Botswana recently ended a 48-day lockdown allowing businesses and schools to reopen under strict conditions as it seeks to restart the economy.

($1 = 11.7509 pulas)

(Reporting by Brian Benza; Editing Tanisha Heiberg and Emelia Sithole-Matarise)

© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.