The Economic Competitiveness and Transformation Support Programme will strengthen public finances, increase private-sector investment and expand assistance to micro, small and medium-sized enterprises.
The programme targets an increase in non-mining tax revenue to 11.8% of gross domestic product by 2027/28 and private investment to 30% by 2028.
Botswana’s economy contracted by 2.8% in 2024 and 0.7% in 2025 amid a prolonged downturn in the diamond market.
Diamonds account for about 30% of gross domestic product and nearly 80% of exports. Higher energy costs linked to the Middle East conflict have added pressure. “Botswana has clearly defined its priorities in National Development Plan 12 and Botswana’s Transformation Programme,” AfDB Deputy Director-General for Southern Africa and Country Manager Moono Mupotola said.
“Our role is to help finance the adjustment while protecting those least able to bear its costs.”
The programme supports the temporary suspension of fuel, road and security-of-supply levies, limiting the fuel-price increase to about $0.04 a litre.
The intervention is expected to lower inflation by 1.6 percentage points and reduce pressure on transport and food costs.
Supplementary payments will also support an estimated 279 000 pensioners, disability-grant recipients, destitute households and home-based care patients for three months.
Botswana plans to increase household electricity access from 79.5% in 2025/26 to universal coverage by 2030. A competitive renewable-energy auction will invite private investment in solar and wind generation.
The Francistown fuel depot will be expanded from 38 million litres to 98 million litres to strengthen supply security.
Land reforms are expected to provide 4 300 additional families with secure titles, allowing property to be used as collateral.
The programme targets 3 292 active small businesses and 3 935 direct jobs by 2027/28. Women-owned businesses are expected to account for 93% of supported enterprises.
E-procurement reforms could reduce procurement costs by between 5% and 15%.
The operation will also support a pipeline of 186 projects valued at approximately $38.5 billion, with a long-term target of creating 512 000 jobs by 2036.
The OPEC Fund will provide another $170 million in co-financing.
–AfDB/ChannelAfrica–
