Botswanan finance minister urges stakeholders to address capital market challenges

Botswana’s finance minister on Tuesday implored capital market stakeholders to proactively address challenges in the sector.

“Despite impressive achievements of our domestic bond market, the domestic capital market is still facing challenges that we collectively have to surmount,” said Peggy Serame, minister of finance, when officially launching 2023/2024 Government Borrowing Strategy and Issuance Calendar.

She said the secondary market for government securities is still characterized by a lack of liquidity, stemming from a high degree of instrument fragmentation and a narrow investor base.

Serame further said with assistance from multilateral development partners, Botswana is actively engaged in identifying deficiencies and implementing in various sub-sectors of the domestic bond market to close capital market gaps.

“The mission identified several potential areas for improvement across all the building blocks of the domestic bond market, including money market transparency, the legal framework for repo transactions, primary market pricing and predictability of issuance, secondary market liquidity and depth, investor relations management, as well as clearing and settlement risks associated with financial market infrastructure are some of the crucial potential areas for reforms,” said Serame.

With the identified gaps, Botswana endeavors to develop a borrowing strategy that aligns with the current economic landscape and gravitates toward transparency and accountability.

Serame said Botswana has witnessed a deteriorating fiscal position and accumulation of debt in recent years, and authorities have plans to make footprints in global markets, as the government may embark on international roadshows to appeal for debt financing. Enditem