17 Aug 2014

Banks in Botswana have played a major role in the country’s economic activity with their real value added increasing nearly five-fold over a 20-year period.

That was said by the Vice President, Dr Ponatshego Kedikilwe at the Botswana Institute of Bankers (BIOB) annual dinner on August 16. 

As a result, Dr Kedikilwe said the banking sector’s share of the Gross Domestic Product (GDP) had doubled. Such achievements, he said needed to be acknowledged and celebrated. 

“The history of Botswana’s rapid economic transformation, growth and development, he said “cannot be written with reference only to good governance and prudent management of resources. The role of banks also needs to be recognised,” he said.

Therefore, he said banks must face up to a range of challenges so to realise their full potential of contributing to inclusive national development, while at the same time delivering adequate returns to their shareholders.

“It is not enough to contribute handsomely to GDP growth and attainment of middle-income status for the country if the related prosperity is not broad-based and inclusive,” he added. Furthermore, Dr Kedikilwe said there was a growing concern about the high cost of money transfers. 

According to the Africa Progress Panel that was chaired by the former UN Secretary General, Mr Kofi Anna, he said money transfer costs were higher in Africa than anywhere else in the world. 

This high cost, he said retarded the potential growth of e-commerce and desirable linkages between rural dwellers and the more developed parts of the continent. 

Therefore, he expressed hope that the Bankers Association of Botswana and other stakeholders would look into it and related matters with a view to removing impediments and achieving cost reductions.

In his welcome remarks, Standard Chartered Bank chief executive officer, Mr Moatlhodi Lekaukau, also acknowledged that the presence of commercial banks in Botswana had contributed significantly to the country’s economy. 

Banks, Mr Lekaukau said were significant contributors to government revenue with an excess of P5 million. 

However, he said there had been a decline in the productivity of the banking sector in the last two years and more innovations were required to stimulate sector growth.

“Clearly if we are going to play a meaningful role as a sector, we’ll have to find creative ways to ensure we grow sufficiently to fund our contributions to efforts to bridge the gap. Innovations will also be required to find ways that make more sustainable impact towards achieving an inclusive economy,” he added. 

From employment point of view, Mr Lekaukau said banks had employed an excess of 5 000 and the numbers continued to grow annually. 

The theme for this year’s BIOB dinner, he said was very powerful and fitting as it offered those from the banking fraternity opportunity to reflect on the contribution that they have made in their next phase of contribution.

Through financing and operations, he said the banking sector supported value added and other sectors over and above the value it brought to its own sector. 

“Banking finance used to support other sectors such as; agriculture, mining, manufacturing and water construction, have all benefited from the presence of commercial banks in the country,” he said. Ends