Stanbic Bank Botswana has continued to strengthen its position as the leading bank in the Corporate and Investment Banking space in Botswana, with the capability and capacity to drive great influence and impact in the segment.
This was made clear as the Bank engaged media for an intimate discussion session, with guest speaker, Mr. Chris Clarkson, Standard Bank Group Regional Head of Corporate and Investment Banking. The engagement aimed to share key insights, performance and trends in the sector with media, focusing on the local and regional Corporate and Investment Banking (CIB) ecosystems.
What was made clear was the Stanbic Bank Botswana, and the Standard Bank Group, historic leadership in the CIB space, with pioneering and nuanced projects that continue to earn great acclaim even today. Supported by a robust strategy for the business’ CIB outlook, Mr. Clarkson and local Head of CIB, Mr. Sheperd Aisam, unpacked the Stanbic Bank Botswana CIB growth in recent years, as well as the various portfolios this encompasses.
“For any business to succeed, a sound strategy is key; one that is flexible, effective and promotes progress. Stanbic Bank Botswana continues to drive strong performance in line with the Group’s strategy and has continued to yield growth with each financial year. In addition, Stanbic Bank Botswana is one of the leading performers across the regional footprint, with a remarkably well performing CIB division,” said Mr. Clarkson. “The team in Botswana continues to do a stellar job of growing the CIB capabilities of the Bank, and they have every support from Group level when they need it. That’s over 150 years of experience and insight.”
Stanbic Bank Botswana prides itself in the remarkable capabilities and achievements in the CIB space. The CIB division of the business has proven experience in the following sectors: Non-Banking Financial Institutions, Oil & Gas, Fast Moving Consumer Goods, Mining & Metals, Telecoms & Media, Power & Infrastructure, Power and Real Estate. Key to making these capabilities even more powerful and effective for stakeholders, the Bank shared, is collaboration and engagement.
“We continue to position ourselves as a leading operation in the market by placing an emphasis driving value for our customers, the Group and communities we operate in. An important aspect here is working with our valued partners, collaborating as a means towards making progress real, engaging and communicating with our key stakeholders along that journey. Media are a key stakeholder for us, and a key player in our value chain, sharing narratives of our community, economy and business efforts. Not only are platforms such as these vital towards ensuring exchange of information from the Bank to the media, but they are an opportunity to have a two-way dialogue and hear from our media friends their views on the sector and the economy.”
Continued Mr. Aisam, “Indeed, it is only through such conversation that we see mutual benefit, growth and ultimately, a better offering for both our customers as Stanbic Bank Botswana, and for readers and listeners of media publications. Our futures and our prospects are very much intertwined, and so we are grateful for this platform to once more build upon our relationship,” shared Mr. Aisam.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
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.
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.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 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 Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”