The African Development Bank (AfDB) has approved a $304 million loan to support Botswana in managing its growing fiscal challenges and implementing key governance and economic reforms.
The funding, endorsed by the Bank Group’s Board of Directors, will finance the Governance and Economic Resilience Support Programme (GERSP) for the 2025/2026 fiscal year.
The programme is designed to help cushion Botswana from the impact of declining diamond revenues, which account for approximately 80% of the country’s exports. In 2024, Botswana’s economy contracted by 1.7%, and its fiscal deficit widened sharply—from a balanced budget in 2022/23 to 4.7% of GDP in 2023/24, with a projected increase to 6.7% in the current fiscal year.
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“This operation comes at a critical time for Botswana,” said Moono Mupotola, AfDB’s Deputy Director General for Southern Africa. “We will work with the new administration to implement reforms that will deepen fiscal sustainability, strengthen transparency, and create a more business-friendly environment for economic diversification.”
GERSP is structured around two pillars: strengthening fiscal sustainability and transparency, and stimulating inclusive economic growth. Reform priorities include boosting domestic revenue mobilisation, curbing illicit financial flows, and enhancing public expenditure efficiency. The programme also places a strong focus on supporting micro, small and medium enterprises (MSMEs), especially those led by women and youth.
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According to Abdoulaye Coulibaly, AfDB’s Director of Governance and Economic Reforms, the operation is a transitional measure to address immediate budgetary pressures while aligning with Botswana’s long-term development goals.
The initiative builds on the AfDB’s prior engagements, including the 2021–2022 Economic Recovery Support Programme, and is fully aligned with the Bank’s Country Strategy Paper for Botswana (2022–2026), which emphasises economic resilience and private sector development.
