08 Oct 2023

Efforts to improve the Savings and Credit Co-operatives (SACCOs) ecosystems in Botswana are riddled by challenges, Assistant Minister of Agriculture, Mr Molebatsi Molebatsi has said.

Officiating at the 13th Africa Confederation of Savings and Credit Co-operative Associations (ACCOSA) Regulators Round Table at Phakalane on Thursday, Mr Molebatsi said lack of required capacity to conduct sufficient and prudent supervision had negative effective in the development of the sector.

He said the cooperatives were also riddled by inadequate resources to cover high costs of supervision and monitoring.

The cooperatives, he said, further faced lack of accurate and complete data hence government was committed to supporting the development of cooperatives.

Mr Molebatsi said the cooperatives business model was well understood by the local community, adding that in the past the only business that was known to a Motswana was that of cooperatives.

 The assistant minister said for over 150 years, financial co-operatives had been important contributors to economic and social development.

Despite the collapse of cooperatives, Mr Molebatsi said the business model was a success story.

He said cooperatives ‘used to own property, provide social amenities and finance our people.’

“The biggest supermarkets back then were owned by cooperatives, but for some reasons they collapsed. I believe Cooperatives are one way of making our people play a pivotal part in the economy. I believe in Cooperatives. I believe in you,” he said.

Mr Molebatsi highlighted that it was important to resuscitate cooperatives and encourage people to embrace the SACCOs business model.

He noted that in countries such as Kenya, the SACCOs businesses accounted for 60 per cent of the Gross Domestic Product (GDP).

He added that cooperatives were also doing well in Ghana.

As such, he said the business model would go a long way in boosting the country’s economic development.

Currently, he said the government through CEDA was providing financial injection to the development of organised cooperatives to up to P56 million as well as offering them governance and mentorship through LEA.

Therefore, he applauded ACCOSA for progressing the development of Cooperatives in Africa.

Mr Molebatsi explained that the Cooperatives Regulators annual gathering from across Africa and beyond, which would be followed by the Cooperatives Congress provided an insight on how cooperatives could transform and empower people.

He said the meeting also created a platform for sharing experiences and devise ways to overcome regulation challenges.

The assistant minister said the country was hosting the event at an opportune time when it was embarking on the resuscitation of the secondary financial cooperative and the Botswana Savings and Credit Cooperatives Association (BOSCCA).

“A strong BOSCCA will lead to a strong financial cooperative sector, leading to a successful realisation of our economic inclusion initiative which will ensure Botswana attains its vision of a high income status by 2036,” said Mr Molebatsi.

He also revealed that in many jurisdictions, legislation had not kept pace with the development of the financial co-operatives.

As such, Mr Molebatsi said legislative and regulatory deficiencies as well as excessive regulatory burdens could imperil the safety and soundness of financial co-operatives as well as restrict their ability to meet their members’ financial needs.

Like all other financial institutions, Mr Molebatsi said financial co-operatives depended on public confidence for their success. Highlighting on the SACCOs regulation and supervisory status in Botswana, Mr Molebatsi said the Botswana cooperatives regime dated as far back as the Cooperative Agricultural Society Proclamation Act of 1910 and therefore was not successful in enhancing cooperative development during the colonial period.

He said the act was enacted in 1962 to form the Cooperatives Societies Act, which was then repealed by the 1989 Act followed by the current in use, the 2013 Act.

Mr Molebatsi said the amendments were an effort to align the law governing cooperatives to the evolving global business environment, adding that the first SACCOs was registered in 1965 as a Thrift and Loan Cooperative Society.

He said their numbers were at 69 as per the record on December 2022, with a total membership of about 53 000 and with total assets of approximately US$56 million (P733 735 408).

In an effort to improve prudent supervision of SACCOs as well as the country’s regulatory and supervision standards, Mr Molebatsi said the Banking Act was enacted in 2023.

He said the review and amendment of the Financial Intelligence Act of 2009 as it was replaced with the 2022 Act would assist in preventing, detecting and deterring money laundering and terrorism financing in the sector and by so doing mitigate against money laundering and related financial crimes.

The Cooperatives Regulators gathering was a preliminary and preparatory event to the SACCA Congress which will end on October 13 in Gaborone. Ends