Botswana’s public debt position has edged higher, driven largely by a sharp rise in domestic borrowing, according to the Annual Statements of Accounts (ASA) for the financial year ended 31 March 2023. in 2024, the Accountant General Office also raised concerns about the government’s borrowing practices highlighting a significant rise in total outstanding debt for the fiscal year 2021/22.
Accountant General Tebogo Tumango has now warned that while debt levels remain within manageable thresholds, the composition and pace of accumulation point to growing fiscal pressure, particularly on the domestic market.
‘There was a slight increase in total outstanding debt during the 2022/23 financial year, driven by growth in both external and domestic borrowing,’ Tumango noted in the report.
By the end of March 2023, total gross debt, including guarantees, stood at P50.90 billion, reflecting a 4 percent increase compared to the previous financial year. The rise was largely shaped by increased domestic financing needs, even as external debt recorded a modest decline.
External debt outstanding fell by 5 percent to P21.9 billion. The decrease was attributed to repayments exceeding new disbursements during the period under review, signalling a continued effort to manage foreign exposure and limit external vulnerabilities.
In contrast, domestic debt surged significantly, rising by 16 percent to P28.92 billion. The increase was driven by the continued rollout of the P30 billion Note Issuance Programme, which also saw Government intensifying its presence in the domestic capital market through more frequent auctions, shifting from quarterly to monthly issuances.
The programme was expanded following a 2019 review that identified structural constraints in the local bond market, leading to an increase in its ceiling from P15 billion in 2020. Authorities have since relied more heavily on domestic instruments to finance budgetary requirements.
Despite the increase in borrowing, Botswana’s debt ratios remain relatively low by international standards. The total debt-to-GDP ratio stood at 19.60 percent at the end of the 2022/23 financial year. External debt accounted for 8.46 percent of GDP, while domestic debt stood at 11.13 percent.
Government has also intensified revenue-enhancing measures in response to fiscal pressures. These include the revision of user fees and service charges, with the Ministry of Finance and Economic Development authorised to adjust charges annually in line with inflation or other applicable rates, following consultation with relevant ministries.
Consultations were ongoing during the 2022/23 financial year in preparation for the third phase of revised fees and charges. Officials say the measures form part of broader fiscal consolidation efforts aimed at widening the domestic revenue base and ensuring long-term fiscal sustainability amid rising expenditure demands.