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Banking industry well capitalized to support economy – Pheko-Moshagane


Chairperson of Botswana Banking Association, Keabetswe Pheko –Moshagane, who is also Managing Director of Absa Bank Botswana has assured the country that Botswana’s banking industry is solid, well capitalized and ready to support the economy during these challenging times of the COVID-19 pandemic.

Moshagane was speaking at a Press briefing addressed by commercial banks this weekend to deliberate on the industry’s response strategies to COIVID-19. She said COVID-19 pandemic’s impact on the economy is severe and clearly the world has not experienced this before.

She however noted that it is not easy to make timeline predictions as it is not known how long the pandemic and adverse situation would last. “This is still a new wave and turn of events as far as impact on the economy is concerned, the situation is still at its infant state,” she said.

The Banking Association chairperson however cautioned that if the pandemic and its adverse impacts intensify and spillover to the rest of 2020 and beyond, the banking industry would be affected just like any other sector of the economy.

Pheko-Moshagane reiterated that as of the moment and at least till the end of the year the banking industry’s liquidity stance is well positioned to anchor the economy. She highlighted that commercial banks play a critical role in the economy of any developing country and therefore it is important for the industry to formulate a framework best suited to support the nation accordingly.

In general, as a way of cushioning their customers during COVID-19 crisis, the banking industry will offer three months repayment holidays to customers with mortgage, car and other loans. Moshagane explained that the loan repayment break would be reviewed after three months depending on the situation relating to the pandemic.

As of 2011 Botswana’s Financial System sat at an excess of nearly P300 billion, inclusive of the foreign reserves and funds held by Botswana Development Corporation and Motor Vehicle Accident Fund. Currently Botswana’s 10 commercial banks account for about 33 percent of the financial system, hosting in access of P100 billion in assets.

According to information from Bank of Botswana which is the industry’s regulatory and oversight body, commercial banks have been able to roar to profitability  year on year despite sluggish economy and unfavorable circumstances in the market.

In terms of banks’ Net Income/Profitability over the last 8 years, data from Bank of Botswana shows that the industry profitability picked up from P1.57 billion in 2011 to an average of P1.7 billion in 2013 before dropping to P1.4 billion in 2014 after Bank of Botswana banned increase of fees. In 2015 following reduction in interest banks income significantly declined to end the year at P 1 billion. Profitability picked up to 2 billion in 2018.

Loans and Advances account for roughly 60% of these Assets while deposits account for over 70% of liabilities. The banks ended 2019 with about P75.7 billion of deposits, and in the first month of 2020 this figure now stands at P76 billion, mirroring 0.4% increase.

Total credit given out by commercial banks stood at P62.8 billion in 2019 and by the end of January 2020 it was P63.5 billion, up by 1.1%, signaling that in January only, banks wrote out roughly P729 million in new loans, with P403 million going towards businesses and P347 million channeled to households

No new banks have entered the sector since 2012, and commentators have indicated that outdated regulation and the dominance of foreign-owned commercial banks are factors that potentially keep new entrants out.

The microlending sector, on the other hand, is growing and has the potential to increase financial inclusion. Large commercial banks continue to introduce more technologies and are moving towards branchless banking. Latest available industry statistics reflect a stable, adequately-capitalised banking sector which experienced growing customer deposits and improved profitability.


Seretse, Kgosi may walk free

30th October 2020

The P250 million National Petroleum Fund (NPF) saga that has been before court since 2017 seems to be losing its momentum with a high possibility of it being thrown out as defence lawyers unmask incompetency on the part of the Directorate of Public Prosecution (DPP).

The Gaborone High Court this week ruled that the decision by the State to prosecute Justice Zein Kebonang and his twin brother, Sadique Kebonang has been reviewed and set aside. The two brothers have now been cleared of the charges that where laid against them three years ago.

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Understanding the US Electoral College and key election issues 

28th October 2020
Mark J Rozell

The United States (US) will on the 3rd of November 2020 chose between incumbent Donald Trump of the Republicans and former Vice President Joe Biden of the Democrats amid the coronavirus pandemics, which has affected how voting is conducted in the world’s biggest economy.

Trump (74) seeks re-election after trouncing Hillary Clinton in 2016, while Biden (77) is going for his first shot as Democratic nominee after previous unsuccessful spells.

US Presidents mostly succeed in their re-election bid, but there have been nine individuals who failed to garner a second term mandate, the latest being George W H. Bush, a Republican who served as the 41st US President between 1989 and 1993.

Dr Mark Rozell, a Dean of  the School of Policy and Government at George Mason University  in  Arlington, Virginia describes the complex US electoral system that will deliver the winner at the 3rd November elections.

“The founders of our Republic de-centralised  authority  significantly  in  creating  our  constitutional  system,  which  means that  they  gave  an  enormous  amount  of  independent  power  and  authority  to  State  and  local governments,” Dr Rozell told international media on Elections 2020 Virtual Reporting Tour.

Unlike  parliamentary  democracies, like Botswana the  United  States  does  not  have  all  of  the  national government elected in one year. They do not have what is commonly called mandate elections where  the  entire  federal  government  is  elected  all  in  one  election  cycle  giving  a  “mandate”  to  a particular political party to lead, and instead US have what are called staggered elections, elections over time.

The two house Congress, members of the House of Representatives have two-year long terms of office. Every two years the entire House of Representatives is up for re-election, but senators  serve  for  six  years  and  one  third  of  the  Senate is elected every  two  years.

For this election cycle, US citizens will be electing the President and Vice

President, the entire House of Representatives and one third of the open or contested seats in the Senate, whereas two thirds are still fulfilling the remainder of their terms beyond this year.

An  important  facet  of  US electoral  system  to  understand  given  the  federalism  nature  of  the republic, the US elect presidents State by State, therefore they do not have a national popular vote for the presidency.

“We have a national popular vote total that says that Hillary Clinton got three million more votes than Donald Trump or in Year 2000 that Al Gore got a half million more votes than George W. Bush, but we have what is called a State by State winner takes all system where each State  is  assigned  a  number  of  electors  to  our  Electoral  College  and  the  candidate  who  wins  the popular vote within each State takes 100 percent of the electors to the Electoral College,” explained Dr Rozell.

“And that is why mathematically, it is possible for someone to win the popular vote but lose the presidency.”

Dr Rozell indicated that in 2016, Hillary Clinton won very large popular majorities in some big population States like California, but the system allows a candidate to only have to  win  a  State  by  one  vote  to  win  a  100 percent of  its  electors,  the  margin  does  not  matter.

“Donald  Trump  won  many  more  States  by  smaller  margins,  hence  he  got  an  Electoral  College majority.”

Another interesting features by the way of US constitutional system, according to Dr Rozell, but extremely rare, is what is called the faithless elector.

“That’s the elector to the Electoral College who says, ‘I’m not going to vote the popular vote in my State, I think my State made a bad decision and I’m going  to  break  with  the  popular  vote,’’ Dr Rozell said.

“That’s constitutionally a very complicated matter in our federalism system because although the federal constitution says electors may exercise discretion, most States have passed State laws making it illegal for any elector to the Electoral College to break faith with the popular vote of that State, it is a criminal act that can be penalized if one is to do that. And we just had an important Supreme Court case that upheld the right of the states to impose and to enforce this restriction”

There are 538 electors at the Electoral College, 270 is the magic number, the candidate who gets 270 or more becomes President of the United States.

If however there are more candidates, and  this  happens  extremely  rarely,  and  a  third  candidate  got  some electors  to  the  Electoral  College  denying  the  two  major  party  candidates,  either  one  getting  a majority, nobody gets 270 or more, then the election goes to the House of Representatives and the House of Representatives votes among the top three vote getters as to who should be the next President.

“You’d have to go back to the early 19th century to have such a scenario, and that’s not going to happen this year unless there is a statistical oddity, which would be a perfect statistical tie of 269 to 269 which could happen but you can just imagine how incredibly unlikely that is,” stated Dr Rozell.


Since the 2000 United States presidential election, red states and blue states have referred to states of the United States whose voters predominantly choose either the Republican Party (red) or Democratic Party (blue) presidential candidates.

Many  states  have  populations  that  are  so  heavily  concentrated  in  the  Democratic party or the Republican party that there is really no competition in those states.

California is a heavily Democratic State, so is New York and Maryland. It is given that Joe Biden will win those states. Meanwhile Texas, Florida and Alabama are republicans. So, the candidates will spent no time campaigning in those states because it is already a given.

However there are swing  states, where  there is a competition between about five and 10 states total in each election cycle that make a difference, and that is where the candidates end up spending almost all of their time.

“So  it  ends  up  making  a  national  contest  for  the  presidency  actually  look  like  several  state-wide contests with candidates spending a lot of time talking about State and local issues in those parts of the country,” said Dr Rozell.

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Masisi to make things right with Dangote

26th October 2020

High Commissioner of the Federal Government of Nigeria to Botswana, His Excellency Umar Zainab Salisu, has challenged President Dr Mokgweetsi Masisi to move swiftly and lobby Africa’s richest man, Nigerian Billionaire, Aliko Dangote to invest in Botswana.

Speaking during a meeting with President Masisi at Office of President on Thursday Zainab Salisu said Dangote has expressed massive interest in setting up billion dollar industries in Botswana.  “We have a lot of investors who wish to come and invest in Botswana , when we look at Botswana we don’t see Botswana itself , but we are lured by its geographic location , being in the centre of Southern Africa presents a good opportunity for strategic penetration into other markets of the region,” said Salisu.

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