Financial services

Botswana’s banking and monetary system is sophisticated and well developed. The Bank of Botswana is the central bank and was established in 1975. Presently there are six commercial banks operating in the country. They are:

• Barclays Bank of Botswana Limited
• Standard Chartered Bank of Botswana Limited
• First National Bank of Botswana Limited
• Stanbic Bank of Botswana Limited
• WesBank
• Bank of Baroda (Botswana) Limited

There are various non-banking financial institutions such as:

• Botswana Building Society
• Botswana Savings Bank
• National Development Bank
• African Banking Corporation
• Investec Holdings (Botswana) Limited

The National Development Bank
This bank was established by statute to provide finance for the promotion of productive enterprises in agricultural, industrial and commercial sectors.

The Botswana Development Corporation (BDC)
This is a commercial and industrial development agency that participates in promoting new projects in partnership with local as well as foreign investors, which may be in the interest of the country. BDC meets the full requirements of a business – machinery, buildings, installation costs, pre-operating expenses and working capital.

Insurance
There are four registered local insurance companies in the country:

• Mutual and Federal Insurance Company of Botswana (Pty) Ltd.
• Botswana Eagle Insurance Company Ltd.
• Regent Insurance Botswana (Pty) Ltd
• Botswana Insurance Company Limited

Privatisation
The Public Enterprise Evaluation and Privatisation Agency is expected to complete the preparation of a Privatisation Motor Plan (PMP) by the first quater of 2003/04. The PMP will provide a broad strategic framework that outlines the tools and methods of privatisation together with a three-year privatisation work programme.

Inflation
Consumer price inflation averaged 8.1 percent in 2002, compared to 6.6 percent in 2001 and 8.5 percent in 2000. Most of the increase in inflation in 2002 occurred in the second half of the year, due to the impact of VAT @ 10%.

Interest Rates
Bank rate was increased during the last quarter of 2002 to 15.25 percent from the 14.25 percent that has prevailed since October 2002. Prime leading rate stood at 16.75%.

Credit Rating
After the initial assignment of sovereign ratings of the country in the ‘A’ grade by Moody’s Investors Service and Standard and Poor’s in 2001, the subsequent review in 2002 by both rating agencies maintained the ‘A’ rating.