The financial assistance will support the Governance and Economic Resilience Support Programme (GERSP), a one-year budgetary initiative for the 2025/2026 fiscal period. Designed as a timely intervention, the programme responds to the economic strain caused by declining diamond revenues, Botswana’s primary export and a critical contributor to national income.
In 2024, Botswana’s economy contracted by 1.7%, largely due to subdued global demand for diamonds. As revenues dwindled, the country's fiscal position deteriorated—from a balanced budget in 2022/23 to a deficit of 4.7% of GDP in 2023/24. The shortfall is expected to deepen further, reaching 6.7% in the current fiscal year.
The GERSP initiative is structured to improve fiscal management and support macroeconomic stability. Core components of the programme include enhancing domestic revenue mobilisation, increasing efficiency in public spending, and advancing financial transparency. A key focus is also placed on curbing illicit financial flows and streamlining government expenditure processes.
Beyond fiscal consolidation, the programme aims to stimulate economic diversification by creating an enabling environment for private sector participation. Special emphasis will be placed on fostering entrepreneurship among women and youth through targeted support for micro, small, and medium enterprises (MSMEs), helping to promote inclusive growth and job creation.
The loan serves as a bridge to address immediate budgetary constraints while setting the stage for deeper collaboration with Botswana’s newly elected government, which took office in late 2024. It is also a continuation of the Bank’s broader engagement with the country, following previous interventions such as the Economic Recovery Support Programme, which was co-financed with the OPEC Fund.
This latest initiative aligns with the African Development Bank’s current Country Strategy Paper for Botswana (2022–2026), which underscores economic governance and private sector development as key priorities in building long-term resilience.
