For a country celebrated for its prudent economic policy, Botswana’s dependence on foreign multi-national banks as financial intermediaries in its economic system is a signal of weakness in the economic structure or political economy, Gaborone Bonnington South legislator, Ndaba Gaolathe has said.
Gaolathe, who is also the leader of Alliance for Progressives (AP), told this publication that despite some successes of Botswana’s financial sector, Botswana continue to face major challenges within the sector. “The main challenge is that most of the rural population, especially the rural poor remain unbanked and are without access to financial services in general,” he said. “Access to credit is also a significant impediment to the development of SMEs in general, although it is also noteworthy that management capacity is at least as important.”
Gaolathe contended that the banking service charges reveal competitive failures and the overall risk analysis capacity of banking system is not adequate for the efficient development of the economy in general. “These factors point to a dire need to restructure the financial services sectors in order to enable or pave way for an enabling environment for the banking/financial services sector,” he said.
Gaolathe, an Economist by training, is of the view that Botswana is desirous of a financial sector that exhibits a number of characteristics, among others; establishment of indigenous financial institutions, with broad-based ownership by citizens; enhanced access to financial services and credit by the majority of the people including rural households including low income groups; robust competition within the financial sector to fertilize modern, diverse and competitively priced services including access to credit, conducive to stronger economic growth as well as a better graduation of lower financial service providers to second and first tier banking.
“Our position has been that the Botswana’s banking laws are excessively stringent and create immensely high barriers that preclude Botswana from achieving the type of financial services environment that is desirable,” he said. “In fact, this stringency of our archaic banking laws is the main cause for the depravations in our financial/banking system,” he argued. Gaolathe indicated that there is a fundamental need to change our banking laws, with certain goal posts in mind. “One of the things we need to do is to provide a regulatory framework that is tiered, if you like, into several tiers,” he suggested.
“That regulatory framework should provide for microfinance institutions, rural/village banks, stockvels, burial societies, cooperatives as well as other membership-based credit or savings unions.” He said such a framework should aggressively facilitate the entry of small niche banks, and of other deposit-taking credit institutions. “This should entail the lowering in some cases of capitalization requirements, and of branch network requirements,” he added. “Requirements should not focus on banking experience of the institution but on the collective expertise and experience of personnel involved.”
Gaolathe noted that apart from the law or regulatory framework, it is necessary to devise policy to enhance the capacity of self-regulatory associations that coordinate or oversee the various players in these financial sub-sectors. He said such policy instruments should include direct financing of these associations and providing incentives for first tier players to take interest in participating in the larger ecosystem that promotes players in the lower tiers.
Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.
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Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.
The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.
Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.
“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.
He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.
Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.
“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.
He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.
He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc
“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran
Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.
“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.
Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that the BIE provides a fertile environment where they can meet, share ideas and grow professionally.
“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.
He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.
“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams
He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .
Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.
“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.