09 May 2019

Botswana’s Pula Fund, Africa’s largest and oldest sovereign wealth fund, remains a key anchor for sovereign rating, and continues to have long term benefit to the nation, President Dr Mokgweetsi Masisi has said.

Speaking at a sovereign wealth funds in Africa conference in Gaborone on May 9, he said government had taken a deliberate decision to ensure that mineral revenue was exclusively allocated to capital expenditure as well as on education and health.

This, he said, also ensured capacity building for both current and future economic activity.

Dr Masisi said the country’s foreign exchange reserves and government savings were important in times of need and as an anchor for sound macroeconomic policies.

He said judicious management of the foreign exchange reserves contributed to macroeconomic stability and associated integrity, credibility and conducive environment for sustainable development.

“I am happy to inform you that the benefits of foreign exchange reserves to Botswana, were particularly apparent to Botswana, and were particularly apparent during the global financial crisis,” he said.

The President said well managed sovereign development funds  could play a meaningful role in Africa’s development.

He said the funds served as a repository for secure investment in financial assets of the proceeds from depletable natural resources.

The funds served as guardians of the nation’s financial wealth, he said.

Dr Masisi further said the funds could be instrumental in underpinning preconditions for the sustainable use of natural resources to benefit countries.

The President called on African countries with such funds to lead efforts to demonstrate that Africa was not chronically deficient in issues of money laundering and financing of terrorism as most financial institutions were affected by the impact of “de-risking by counterparts in other, supposedly more secure jurisdictions”.

The conference, sponsored by government in partnership with Brown Capital Management and Wilson Centre, was held under the theme ‘Secure the Future’.

It brought together representatives from different  African countries that have established funds or were in the process of establishing them.

The high level meeting was attended by African and international heads of fund policy makers and stakeholders from multilateral institutions to reflect on the successes and challenges and focus on key issues in the governance of funds in long-term African development.

The one-day conference was also expected to take stock of the key lessons, policies, best practices from Africa’s experience thus far and consider lessons learned and policies from other regions. ENDS