Parliament has been asked to raise the ceiling on Botswana’s government bond issuance programme from P55 billion to P85 billion, with Finance Minister Ndaba Gaolathe insisting the increase is about financing flexibility rather than a plan to borrow more.
Gaolathe told legislators that the proposed ceiling should not be interpreted as a borrowing target or an intention to use the full amount. Instead, it would set the maximum value of government securities that may be outstanding at any given time.
The existing programme is nearing its limit, with domestic government securities outstanding at P48.3 billion at the end of March 2026, equivalent to about 88% of the current ceiling.
Government’s financing requirement for 2026/27 is estimated at P26.35 billion, with about P12 billion expected to be raised through domestic bonds. External financing remains important but can involve lengthy negotiations and conditions beyond government’s control.
Gaolathe also pointed to the Retirement Funds Act of 2022, which requires pension funds to increase domestic investment and reduce offshore holdings. The resulting repatriation of pension assets could increase demand for government securities, which provide relatively safe investment instruments while supporting domestic liquidity management.
The bond programme was established in 2004, initially when government was running surpluses, to develop the domestic capital market and provide long-term investment instruments for pension funds. Its ceiling was subsequently increased to P15 billion, P30 billion and P55 billion in 2024.
Gaolathe said reforms including monthly auctions, published borrowing calendars and liability-management operations had strengthened the market and investor demand remained strong.
He stressed that raising the ceiling would not authorise additional government spending. Actual borrowing, he said, would remain determined by the budget, debt management strategy and debt-sustainability framework.
The higher ceiling would therefore give government additional headroom to finance approved priorities without relying excessively on more expensive short-term borrowing.