Minister of Finance and Economic Development, Kenneth Matambo assured parliament that the Botswana government has not engaged in any negotiations with China to finance the Nata/Maun road.
During Friday’s final session, Matambo told parliament the Chinese government had previously sent a group of experts to Botswana to conduct a feasibility study on the badly potholed road.
Matambo was responding to queries from Member of Parliament (MP) for Mogoditshane, Sedirwa Kgoroba, who wanted the Minister to explain the terms and conditions of the Chinese grant for the feasibility study.
He also wanted the Minister to clarify whether Botswana as a recipient is not expected to award the construction tender to a Chinese state owned contractor.
However, Matambo explained that the feasibility study was financed by China through a grant, stating that loan negotiations for the construction of the road have not commenced.
“The requirement for Chinese loans is that a feasibility study be conducted for the project to be considered,” he said, adding that government approached the Chinese government to fund the feasibility study through a grant – a request China agreed to.
Responding to a question on why government did not borrow locally in order to develop and deepen the capital markets, Matambo said it made sense to use a grant when available rather than raise a loan.
The Minister stressed that no negotiations have started regarding financing of the construction of the road.
“According to the Public Finance Management Act of 2011 before I can conclude any loan agreement, a loan authorisation bill has to be presented to this Honourable House for authorisation,” noted Matambo.
Chinese loans have been viewed with suspicion in the past, as they are believed to benefit Chinese companies only, with the money ending up in China again.
Last year, China’s President, Xi Jinping announced US$60 billion in various types of loans and aids to Africa.
China also offered Botswana a US$31 million loan while at the same time cancelling the country’s P80 million outstanding debt.