29 Jun 2021

Bank of Botswana (BoB) recorded a net income of P8.8 billion in 2020 out of which P2.9 billion was paid to government.

This was disclosed by Bob governor Mr Moses Pelaelo during a media economic briefing in Gaborone yesterday which coincided with the release of the bank’s annual report.

The report was the primary vehicle for the bank’s accountability to the nation on its operations and financial performance, he said.

Mr Pelaelo outlined measures Botswana needed to undertake to address the country’s economic performance challenges to ensure a return to faster rates of growth.

He said there was an urgent need to diversify Botswana’s sources of growth given that mineral-led and public sector-led growth could no longer generate the eight per cent annual rate required to address current development imperatives.

“This requires a transition towards sufficient scale of industrialisation  to generate diversified economic base and exports as well as better articulation of import substitution,” he said.

Mr Pelaelo called for enhancement of domestic resource mobilisation by broadening the tax base and coverage, streamlining incentives and rationalisation of distortionary subsidies.

“The country needs to grow a vibrant middle-class; and have more tax-paying citizens by investing more on innnovation, empowerement and home ownership,” said Mr Pelaelo.

Also required, the BoB governor said, was sustained financial sector focus involving private and  development finance institutions in infrastructure, green economy, digital and outward-looking industrialisation.

“This also requires clarity of role of development finance institutions namely BDC, NDB, CEDA and BSB,” he said.

Mr Pelaelo said Botswana needed to tap into pension funds, annuity providers and other institutional funds resources.

He noted that as at February, pension funds assets amounted to over P106 billion out of which about P68 billion was invested offshore.

“As at that date, this was more than the official exchange reserves at P55.8 billion,” he said. 

Botswana, he said, needed to continue to upscale investment in digital infrastructure to improve IT equipment and Internet availability and affordability  as well as development of digital skills.

Mr Pelaelo said although the COVID-19 pandemic might have damaged the country’s productive capacity in some sectors, there was a limited opportunity to build economic resilience underpinned by embracing of innovation and technology upgrade.

Entrenchment of policy and institutional arrangements necessary for durable welfare enhancement and improvements of livelihoods was also necessary, he said.Ends