02 Mar 2014

The banking sector, through which most payments take place, is stable and profitable, President Lt Gen. Seretse Khama Ian Khama has said.

President Khama said this during the launch of new family of Botswana coin held in Gaborone on February 27 stating that more banks had recently established a presence in the country.

He said all the positive developments were testimony to the confidence the public and international community had in the national currency, and to the widely attested record of prudent economic management, for which the country was rightly recognised.

The government, he said, had continued to uphold the principles of prudent economic management because it was vital to do so in the interests of long-term sustainable economic growth. “We have continued a programme of fiscal consolidation, despite the challenges arising from upheavals in the global economy,” he said.

He said it was of critical importance to avoid a possible accumulation of unsustainable public debt that could, if left unchecked, undermine the stability of the currency and the economy generally.

President Khama quoted the Minister of Finance and Planning’s budget speech which stated that, "it is important that the country returns to budgetary surpluses which stand us in good stead in times of economic downturn.”

Bank of Botswana, he said, had supported economic growth principally by ensuring that the rate of price increases benign, in line with its mandate of fighting inflation. Inflation had to a large extent been kept at low and sustainable levels in response to monetary policy, which has been adjusted from time to time, as necessary.

The bank rate, he said, had been reduced by two percentage points since April 2013, such that market interest rates were supportive of domestic activity, as well as the government’s objectives of economic diversification and job creation.

President Khama stated that the objectives were further supported by the exchange rate policy, the parameters of which were recently made public by the Minister of Finance and Development Planning with a view to anchor public expectations of the Pula exchange rate.

“While a stable Pula in relation to other currencies provides effective support for both exporters and importers and those producing for the domestic market, the exchange rate should not be regarded as remedy for everything,” he said.

President Khama said competitiveness of domestic producers depends on productivity, which was a matter to be addressed at the level of individual businesses.

He said there was another related gratifying development that should be noted, this he said was the fact that infrastructure of payments system has improved significantly, its reliability and efficiency. Electronic transactions he said have grown very sharply in recent years and were now well entrenched, he said.

President Khama said the use of information technology has enhanced the security and timeliness of both government and business transactions, citing that Botswana Unified Revenue Service was now on line with the Real Time Gross Settlement System, saying it permits real time management of all tax transactions.

He further stated that the emergence of electronic money or e-money has tremendous potential to make financial services more accessible and inclusive, as the internet and mobile telecommunications technologies were being used.

He underscored the need for public education across the country so that everyone could be familiar with features of all coins.

Public education about the new family of coins he said would go a long way in combating counterfeiting, saying all the citizens need to be vigilant at all times, saying people should not allow themselves to be lulled in to a false sense of security.

He indicated that criminals were actively attacking all levels of the financial system, ranging from counterfeiting notes, coins to highly sophisticated cyber-crime, stating that the intended victims were ordinary members of the general public.

President Khama urged all stakeholders, including law enforcement agencies and the judiciary, to familiarise themselves with all features of the country’s banknotes and coins, so that the public could be well protected. ENDS