GABORONE: The World Bank has approved a $250 million loan to support Botswana's economic recovery efforts after the diamond-rich country was heavily impacted by the coronavirus pandemic.

Botswana has registered relatively few cases, but lockdown restrictions disrupted economic activities and caused loss of income in key sectors such as diamond mining and sales.

The loan is also designed to strengthen COVID-19 pandemic relief while bolstering resilience to future shocks, World Bank Country Director for Eswatini, Botswana, Lesotho, Namibia and South Africa, Marie Francoise Marie-Nelly said in a statement.

Botswana's parliament in September approved a 14.5 billion pula ($1.36 billion) economic recovery plan, which the government said would be funded through a combination of local borrowing and external sources.

The pandemic led to a real gross domestic product (GDP) contraction of 7.9% in Botswana in 2020 - the largest in the country's history.

Botswana sees its economy rebounding to grow 8.8% in 2021 on the back of a recovery in the global diamond market as well as economic recovery efforts.