BPOPF plays down downgrade, says Botswana remains a low-risk borrower despite rising fiscal pressure.
GAZETTE REPORTER
The Botswana Public Officers Pension Fund (BPOPF) has reaffirmed confidence in the government’s ability to meet its repayment obligations on a P3 billion loan, despite a recent sovereign credit rating downgrade by S&P Global.
The downgrade reflects concerns over Botswana’s widening fiscal deficit and increased public spending, raising questions about borrowing costs and investor sentiment. However, BPOPF maintains that the country’s underlying financial position remains stable.
INVESTMENT GRADE
Speaking at a press conference, BPOPF Chief Investment Officer, Tshephang Loeto stressed that Botswana retains its investment grade status, signalling low risk of default.
“We are aware of S&P downgrading Botswana’s rating, the main thing to emphasize here is that Botswana’s rating is still investment grade,” Loeto said.
He added that this classification reflects Botswana’s relative strength compared to other economies and continued credibility in global markets.
BORROWING PRESSURE
While the downgrade may lead to higher borrowing costs and tighter access to international capital, the Fund pointed to Botswana’s track record of fiscal discipline as a stabilising factor.
BPOPF noted that the government’s diversified revenue streams, including tax income and mineral earnings, continue to support its capacity to service debt.
LOAN CONFIDENCE
The Fund described its exposure to government debt as secure, framing the P3 billion loan as a strategic, low-risk investment aligned with long-term returns for members.
Acting CEO, Kwenantle Otukile said the Fund remains within acceptable risk thresholds despite current fiscal pressures.
“We understand the position that the government is currently in but we believe that the returns we have been able to make from the government since the inception of the Fund… are still within permissible thresholds,” Otukile said.
Otukile added that lending to government continues to deliver value to members while maintaining prudent investment standards.