Thursday, September 28, 2023

A vibrant financial sector will ensure that no one is left behind

This week as reported in one of the stories carried in this edition marks a turning point in the history of the Botswana Stock Exchange or BSE.

The local bourse joined other global markets by transforming from a mutual exchange to a company fully incorporated under and in terms of the companies Act.

We believe that it is fair to say that separating traders from owners will modernise our stock market from multiple dimensions.

It is our hope that the BSE demutualisation process which ended this week will result in a governance structure that makes the local market more flexible in responding to changing economic conditions, reduce concentration of ownership power in a small group of people, and of course improve transparency.

Already the BSE Transition ACT ÔÇô which prescribes the number of board members as well as other terms and conditions, gives hope that the conflict of interest that has been in existence will be dealt with, once and forever.

From now onwards the bourse has been legally incorporated by the Companies and Intellectual Property Authority (CIPA) under the name Botswana Stock Exchange Limited or BSE Limited.

From where stand, this is great achievement is the sense that the demutualisation process opens yet another door or opportunity for us as  nation to create wealth, first for ourselves and secondly for the generation that will follow us.

If the explanation given by the BSE executives lead by Thapelo Tsheole is anything to go by, then policy and decision makers in this country have been presented with yet another opportunity to empower Batswana economically.

In our view, which we hope is a view also shared by the powers that be – the empowerment will come in the form of selling shares to the locals from the stake owned by government on BSE Limited. It only makes economic sense that the government, which is carrying heavy burden in terms of social wage-bill, empower Batswana through all the available means including capital markets participation. We have been told that under the new ownership structure of the BSE limited, the government stake is at over 80 percent, this is surely leaves the government, compared to other shareholders, in the forefront to offload some its shares for free floating at the time when the BSE Limited finally goes public. The process

While it is sad reality that sizeable numbers of Batswana are not able to save due to low wages, we hope that for the small number that can, will be allowed to take this opportunity.

At some point time we witnessed an increased gap between borrowing and saving in the country, which was previously made worse by lack of investment avenues for individual investors. We strongly believe that the ultimate listing of the BSE Limited will close such gaps.

As we always state in this space, going forward, we are all hoping to see two central enginesÔÇöpublic and private investmentÔÇöshift into overdrive and carry our economy onto the next stage of development. This should by all means include each and every Motswana regardless of his or her social status. Our people should always remember that the BSE, although popular in Gaborone, an area populated with more literate people as compared to the rest of the nation, is open to all investors; large and small. As such if the decision makers at the government will, by any chance, allow BSE Limited to make their case in the form of selling shares, fellow citizens should seek appropriate professional guidance and consider buying shares.

Our problem and main challenge has always been financial literacy. While it’s sometimes said that recognising the problem is winning half the battle – that is not the case for most indigenous Batswana. We all surely recognise all the constraints our people face due to our education curriculum but no one is willing to do anything about it. For now we shall continue to count on CSI programs such as the one ran by the BSE for secondary students with the hope that it will help enlighten them on issue s of investment and money.

Through such programs, we will eventually have the stock market play a pivotal role in Botswana’s journey to greater shared prosperity. When all is said and done, the #Bottomline remains that the imminent self listing by BSE presents a rare opportunity for Batswana to stop being economic spectators and become active players even at capital markets.


Read this week's paper