text: Vice President, Dr Ponatshego Kedikilwe, has commended the financial sector for its pivotal role in economic development.
  Speaking at the official opening of the First National Bank Botswana (FNBB) new head office, he observed that better developed financial systems, mostly aided by access, efficiencies and stability measures, are associated with faster economic growth.
  “Botswana’s financial sector is relatively well developed and has a potential to contribute much more to the achievement of sustained broad-based growth. Government expects a strong and vibrant financial system to play a critical role in the development of the economy,” said Kedikilwe.
  He noted that according to Bank of Botswana Data Chart, the Botswana banking and financial services sector account for more than 3.8 percent of the GDP. ┬áHe said the sector had experienced slow growth.
  Kedikilwe stressed that Botswana’s financial sector is one of those identified as having potential as an alternative source of economic growth and diversification.
  During the global financial and economic crises, whose pangs are still echoing globally, Botswana’s financial sector has shown remarkable resilience with no cases of bank failures.
  The number of commercial banks increased to 11 with the addition of two new banks during the 2009/2010 financial year.
  “This reflects a robust supervisory and oversight role played by the Bank of Botswana.┬áBotswana continues to get favourable ratings internationally,” said Kedikilwe.
  He expressed optimism that the Bank of Botswana, in consultation with the Ministry of Finance and Development Planning, would continue to apply appropriate supervisory standards over the financial institutions.
  He said this would pre-empt any institutional fallouts which could constrain prospects for economic growth and diversification.
  Kedikilwe said standards of supervision and governance have largely extended to the rest of the financial services sector through the establishment of the Non Bank Financial Institutions Regulatory Authority.
  The Vice President said this showed government’s determination to ensure banks and other financial institutions operated professionally in a stable and well regulated environment.
  “The financial industry in Botswana and the world over is now at an important juncture. Domestically, we are viewing it as a sector with potential means of diversifying the economy.┬á Globally, the industry is undergoing fundamental scrutiny and review,” he stated.
  He also revealed that there are new regulations to manage systemic risks, for example, Basel III, regulating derivatives trading, liquidity requirements. He added that there is new anxiety about tax evasion and money laundering; new political pressure on banks and on bankers.
  “Within this context, we continue to seek a stable financial sector to benefit the economy and, by extension, the people,” said Kedikilwe.