The African Development Bank (AfDB) has approved a $304 million loan to support Botswana’s efforts to stabilise its public finances and implement key economic and governance reforms amid falling diamond revenues.

Cleared by the Bank’s Board of Directors, the funding will back the Governance and Economic Resilience Support Programme (GERSP), a one-year general budget support operation for the 2025/26 fiscal year.

The loan aims to help Botswana navigate a widening fiscal deficit—expected to hit 6.7% of GDP this year—after the economy shrank by 1.7% in 2024, largely due to subdued global demand for diamonds, which account for around 80% of the country's exports.

“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 deepen fiscal sustainability, strengthen transparency, and create a more business-friendly environment for economic diversification.”