Botswana has obtained a US$200 million policy-based loan from the OPEC Fund for International Development, finalised during Vice President and Finance Minister Ndaba Gaolathe’s recent trip to Austria.
The loan will support Botswana’s Governance and Economic Resilience Support Programme (GERSP), alongside a $304 million contribution from the African Development Bank, approved in April 2025.
An official statement from the OPEC Fund indicates that the loan is intended to promote fiscal sustainability, strengthen governance structures, and enhance economic resilience.
The GERSP initiative emphasises reforms in fiscal management, measures to curb tax leakages, and the launch of a national digital procurement system. These policy commitments were jointly agreed upon with the African Development Bank and serve as the foundation for both financial support packages.
During his visit to Austria, Vice President Gaolathe also concluded a Country Partnership Framework with the OPEC Fund, establishing a structured plan for collaboration between 2025 and 2029.
Although details regarding the funding amounts and terms remain undisclosed, the OPEC Fund stated that future cooperation will focus on key areas including renewable energy, infrastructure, innovation, and digital transformation.
These efforts aim to drive export-oriented private sector growth and strengthen Botswana’s long-term competitiveness.
The OPEC Fund underscored that, together with the African Development Bank, its support will help Botswana create fiscal space for strategic development investments.
These investments are aimed at enhancing trade and investment opportunities, fostering the growth of small and medium-sized enterprises, and promoting inclusive economic initiatives that benefit youth, women, and marginalised communities.
The Finance Ministry recently disclosed that domestic borrowing has reached its statutory limit, leading to a pivot toward external financing options. In addition to securing support from the OPEC Fund and the African Development Bank, the Ministry is actively seeking a funding facility from the World Bank.
Botswana’s recent push for external financing comes in response to a growing fiscal deficit, which is now expected to exceed the P22.12 billion estimated in the February 2025 national budget.
As part of its plan to restore fiscal stability, the government is banking on improved revenue performance later in the year, driven in part by a potential recovery in diamond exports.
These multilateral financing agreements reflect increasing confidence in Botswana’s reform agenda and its long-term economic outlook.
The structural measures outlined under the GERSP are closely aligned with the nation's broader goals of economic diversification, strengthened institutional accountability, and inclusive development.