The African Development Bank has approved a $304 million loan to support Botswana’s economic stability and reforms, addressing the country’s mounting fiscal challenges triggered by declining diamond revenues.
The funding will finance the Governance and Economic Resilience Support Programme, a one-year general budget support operation covering the 2025/26 fiscal year.
Botswana’s economy contracted by 1.7% in 2024 due to weak global demand for diamonds, which account for about 80% of the country’s exports.
The loan aims to implement reforms that will deepen fiscal sustainability, strengthen transparency, and create a more business-friendly environment for economic diversification.
Key areas of focus include boosting domestic revenue mobilization, curbing illicit financial flows, and improving public expenditure efficiency.
Additionally, the program will support small and medium-sized enterprises, particularly those led bya women and youth, to drive job creation and reduce inequality.
AfDB Deputy Director General for Southern Africa, Moono Mupotola, emphasized that the operation comes at a critical time for Botswana, saying, “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.” AfDB Director of Governance and Economic Reforms, Abdoulaye Coulibaly, noted that the loan is a short-term budget relief measure intended to stabilize Botswana’s financial position while engaging with the new government on long-term economic development goals.
The African Development Bank is committed to supporting Botswana’s ambitious socioeconomic development agenda through credible and transformational reforms, project and program financing, and continuous policy dialogue.
This new loan builds on the Bank’s prior support to Botswana, including the Economic Recovery Support Programme implemented in 2021-2022.
