Though the domestic financial system continues to be resilient, characterised by generalised institutional strength and good business performance across the industry, the system is increasingly facing assault on its integrity.
This is especially so on the back of grey-listing and propagation of fraudulent claims of missing billions from the central bank.
“Strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies, corporate governance and accountability concerns in the non-bank financial sector and adverse media reports on unsubstantiated missing government funds continue to dent the integrity of financial institutions in Botswana,” said the central bank in the Financial Stability Report released late last year.
When news broke out in 2019 that as much as P100 billion was laundered, the central bank was quick to dismiss the reports and clarified that they have never even had that kind of money in their accounts.
The claims of the missing billions were also debunked by former president Ian Khama and South African businesswoman Bridgette Motsepe who were implicated in the alleged theft.
Khama and Motsepe instructed UK based firm Omnia Strategy to investigate the allegations, and the findings were scathing to the government case, with the evidence described as malicious and fabricated.
The accounts where the money was supposedly channelled too were found to be non-existent and both deny any kind of involvement. Khama and Motsepe have since launched lawsuits against the government for defamation and making false claims.
While the matter continues to play itself before the courts, it has been damaging to the Botswana’s reputation.
Botswana was dealt a heavy blow in 2018 by the Financial Action Task Force (FATF) which placed it in the notorious list of countries grey-listed for lacking strategic Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT). Furthermore, Botswana was blacklisted by the European Commission (EU) this year, citing reasons similar to FATF.
In response and under pressure to close the identified strategic deficiencies, the Botswana government has since 2018 numerous legislations to plug the loopholes.