Botswana Institute for Development Policy Analysis (BIDPA), 2003, Cost of Banking in Botswana 2001-02 (Gaborone, Botswana: BIDPA).
Poddar, Tushar, 2002, “Pension Fund Arrangements and Asset Market Developments”, in Botswana: Selected Issues and Statistical Appendix, IMF Country Report No. 02/243, by John H. Green and others (Washington: International Monetary Fund).
Prepared by Jung Yeon Kim.
For details on the privatization of the pension scheme, see Poddar (2002).
The BoB supervises the banking sector, namely, commercial banks, the Botswana Savings Bank (BSB), and the Collective Investment Undertaking (CIU). The MFDP supervises mostly the NBFIs including the National Development Bank (NDB), the Botswana Building Society (BBS), insurance companies, and pension funds.
For details on monetary policy, see Subsection D.
Commercial banks include Barclays, the Standard Chartered Bank, Stanbic, the First National Bank, and the Bank of Baroda.
Leasing finance institutions, the Collective Investment Unit (CIU), the Botswana Savings Bank (BSB), the Botswana Building Society (BBS), the Botswana Stock Exchange (BSE), and several microlenders are included.
The government has remained the major net saver, accounting for over 65 percent of the central bank’s total liabilities in 2001. Government deposits declined, however, since the transfer of public officers’ claims to the pension funds, to about 40 percent of the BoB’s total liability as of August 2003.
The market shares of value of deposit liabilities (advances) as of end-2002 were 34 percent (35 percent) and 25 percent (23 percent) for Barclays and the Standard Chartered Bank, respectively.
On average, banks in Botswana charge P 14.67 (P 8.00) for over-the-counter withdrawals (deposits), while South African banks charge on average the equivalent of P 9.73 (P 1.76). The average bank charge for interim bank statement is the equivalent of P 2.41 for banks in South Africa, whereas in Botswana the charge is P 20.90.
These include the insurance companies, brokers/agents, private pension funds, and fund managers.
The FAP was established in 1982, and by its closure in mid-2001, it had lent about P 901 million (2.6 percent of GDP), while the SMME, which was established in 1999, had lent P 10.8 million by 2001. Both the FAP and SMME loans were transferred to the Citizen Entrepreneurial Development Agency (CEDA) in August 2001, to improve the effectiveness of these loan schemes.
The total value of stocks traded during a year relative to average market capitalization.
The ratio of noninterest income (the bulk of which comprises commissions and fees) to total income for commercial banks in Botswana was about 23 percent between 1996 and 2001; in comparison, the ratio for Mauritius during that period was 17.3 percent.
Under the uniform price auction system (the Dutch system), all successful bids are allocated at a uniform price, as long as the bids are at or above the minimum acceptable price.
The diamond sector (comprising one large company, Debswana) accounted for over 50 percent of total revenue in 2002/03 (April-March), (60 percent of beginning-of-period M3 money stock).
It has also been argued that the BoB has developed a strong capacity to supervise onshore banks but need to strengthen its supervisory skills for offshore banks.
The fledging BSE regulatory procedures have been under scrutiny following the Botswana Insurance Holding Limited (BIHL) insider trading scandal in 2003. The BSE has called for tighter controls on the clearance and settlement of transactions and on issues of internal trading.