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Kenewendo finally gets Matambo working

Publishing Date : 15 August, 2017


The Minister of Finance & Economic Development Kenneth Matambo has finally met his match in Special Elected Member of Parliament, Ms Bogolo Kenewendo. The legislator has of late been calling Minister Matambo to duty with an array of piercing and relevant questions.

In one of her latest question Kenewendo has demanded easy access to information relating to Botswana’s national funds and investment accounts. Posing a question in Parliament  to Minister Matambo this week,  the youthful Kenewendo had said it was paramount for every Motswana who demands information on the investment and management strategy of the Government Investment Account (GIA) to access such without difficult. Specifically, Kenewendo’s question probed Minister Mathambo to categorically inform Members of Parliament on guidelines for depositing and withdrawing from the GIA.  

The Specially Elected MP said it was important to have “transparency on those accounts so as to inform Batswana how we deposit and withdraw from our accounts to fund our budgets. That is important so that we can also adequately plan and save for future generations,” she said. When responding to Kenewendo Minister Matambo indicated that the Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01.

The Account represents Government’s share of the Botswana‘s foreign exchange reserves. Its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines. Matambo further shared that the Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

The Minister also revealed that as of June 30, 2017, the total assets in the Pula Fund were valued at P56.818 billion, of which the balance in the GIA was P30.832 billion. “There are three primary considerations that underpin investment policies of the Pula Fund, namely, and in order of priority; safety, liquidity and return,” he said. 
Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns.

“This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently,” said Matambo. According to the Minister  the processes was guided by adherence to Government’s fiscal rules, in particular, the need to maintain an overall budget balance over the medium term more specifically, the principle that revenues from exploitation of non-renewable mineral resources should only be used to fund productive public investments. “Thus, although no explicit guidelines relate to deposits and withdrawals from the GIA, the current fiscal rules ensure that withdrawals from the GIA are limited, and restricted to funding productive Government spending priorities, that benefit t the country’s economic and social development in the long-term,” Matambo explained.

In addition, Kenewendo also wanted to know if there were any plans to turn this account into a sovereign wealth fund mirroring investments of the Norwegians and the United Arab Emirates. When responding to that Matambo reiterated that the Government has no plans of changing the current legal, governance and institutional framework for the management of the Government Investment Account. He said the current set up served the country fiscal interests better. “We have no intention of changing our investments country frameworks to be the same as the Norwegian or United Arab Emirates model of a sovereign wealth fund, however, as part of the Pula Fund, the GIA is already managed according to many of the principles that are applied to Sovereign Wealth Funds,” he said.

The Finance Minister also explained that through the Pula Fund, the Bank of Botswana is a founder member of the International Forum of Sovereign Wealth Funds, and abides by the Santiago Principles, a globally recognized framework of investment and operational principles and practices that emphasize appropriate governance, accountability arrangements and prudent investment activity. Further clarifying on Kenwendo’s questions Matambo said supplementary budgets are funded on consolidated fund.

He said the Pula Fund was administered according to the principles which are followed by those who have Sovereign Funds. Matambo assured members of parliament that Botswana observes international guidelines and that transparency was one of those “I can guarantee you that the way we account for and administer these accounts, or the Pula Funding, we demonstrate total transparency. I personally have got no doubt that there is any lack of transparency, in the manner that we administer these funds,” he noted.

Kenewendo expressed displeasure at the manner in which these national accounts were being administered. She said in terms of transparency the public was unable to access the interest that has been gained from our investments. “Even as we search, it is not possible to access this kind of data. So, I therefore say that there is no transparency in how the investment account is managed and if you say it is so, kindly point to where I can find such information,” she boldly requested.

Kenewendo said it was unclear whether the Consolidated Fund that resources the supplementary budgets was funded through the Government Investment Account and how that was done. She observes that information on national funds and the manner in which budgets are drawn and resourced should be of public accessibility and easily understood by ordinary Batswana who demand to know how their resources are administered and managed.



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