14 Apr 2014

There is no law that compels large companies or corporations to list in the Botswana Stock Exchange when they reach a certain threshold in their balance sheet.

Responding to a question from Tonota North MP, the acting Minister of Youth, Sports and Culture, Mr Vincent Seretse said his ministry did not have any intention of coming up with such a law in the immediate future because Botswana was a free market economy where companies should be free to set up.

He said it was best to let companies consider listing as a voluntary exercise based on the company’s strategy. Mr Seretse said the Finance and Development Ministry is not in a position to quantify opportunity costs for not having a law that compels large corporations to list in the local bourse.

He, however, said there were benefits accrued to the local economy by virtue of companies setting up businesses in the country because of the relative ease of doing business.

Mr Seretse said these include development of infrastructure, creation of employment and revenue generation through taxes. He said in addition, some of the foreign companies form partnerships with citizens thereby giving Batswana direct ownership in those companies.

He further said to instigate a law compelling companies to list on the stock exchange will be an unnecessary encumbrance bound to discourage doing business in Botswana.

Mr Seretse said the government however recognises the importance of companies listing in the stock exchange hence the ongoing efforts to develop capital markets.

He said the government was currently reviewing the Botswana Stock Exchange Act to include trading in bonds and other financial instruments. The BSE market development strategy is focused on both the supply and demand side and the Exchange has outreach programmes on public education and motivating companies, both small and large, to list and issue bonds.

Tonota North MP, Mr Fidelis Molao had asked the minister if there is a law that compels companies or corporations to list in the BSE when they reach a certain threshold in balance sheets to accord Batswana the opportunity to invest in them.

He also asked if the minister will consider coming up with such a law in the immediate future and to state opportunity costs for not having such a law. Ends