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Moody's Investors Service, ("Moody's") has affirmed the Government of Botswana's A2 long-term local and foreign currency issuer ratings. The outlook remains stable.


The affirmation reflects Botswana's credit strengths and challenges captured at the A2 rating level. The low debt burden, strong debt affordability indicators and a sizeable sovereign wealth fund continue to support fiscal strength, despite the gradual erosion of fiscal buffers, while solid institutions and prudent policymaking support macroeconomic stability. A track record of political stability and modest government liquidity and banking sector risks limit event risk. Nevertheless, the economy's small size, slow progress towards diversification and long term structural challenges constrain economic strength, while a large public sector, heavy reliance on a single commodity for growth, exports and budget revenues, and an increasingly rigid expenditure structure, constrain fiscal flexibility.

The stable outlook reflects Moody's view that the balance of risks is unlikely to change over the next 12-18 months. Still-strong fiscal metrics underpinned by a sizeable sovereign wealth fund more than adequate to cover outstanding debt and prudent policies should help weather near-term uncertainties associated with potential global growth disruptions and any adverse impact on consumer demand for Botswana's diamond exports. Nevertheless, the slow progress in terms of fiscal consolidation and economic diversification risks eroding fiscal and external buffers over the longer term.


Botswana's local currency bond and deposit ceilings remain at Aa3, foreign currency deposit ceiling at A2/P-1, and foreign-currency bond ceiling at Aa3/P-1, all unchanged.

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