Tuesday, September 26, 2023

Batswana are slowly learning how to invest

Traditionally Batswana have not really embraced savings and investments. When growing up, we used to hear stories of large amounts of cash vanishing from under our parents and grand parents’ mattresses, or burning to ashes after a fire.

People were reluctant to entrust their life savings to banks and other financial institutions. In Botswana, it is still not uncommon to find a farmer owning over a thousand cattle, but not having a bank account and living as poorly as a church mouse.

But, over time, and with vigorous public education, Batswana are warming up to financial institutions and investment banks. Experts however, say that Batswana are generally biased towards Insurance, Banks and Property. Other investment avenues are still a mystery to many of them.
It is a fact that there is a need for a massive educational campaign to enlighten Batswana about sustainable investments and operations of, for example the Botswana Stock Exchange.
Wise Mbewe, an Authorized Financial Services Advisor and Chief Executive Officer of Federal Alliance Botswana said any investment Advisor should first establish the financial goals of a client.

“These will then be matched with appropriate financial solutions. One has to do a thorough need analysis, followed by an appropriate prescription of financial products and services” he said.

Mbewe says there has been a positive change in the past ten years in Botswana’s investment culture and a shift from traditional forms of investments like cattle farming to more modern investment options in banks, insurance and property. However, lack of education or knowledge about investments is still a major hindering factor.

“The investment environment has changed and is now highly diversified, what is still lacking though is knowledge about available investment options and opportunities available. Botswana still lags behind most SADC countries in terms of knowledge about financial investment” said Mbewe.
He said they are still trying to struggling to set up business schools, institutes of financial markets and insurance institutes to train Batswana and empower them to make sound financial and investment decisions.

Lately, there is general preference for investment in property, especially housing. But, he said, people must know that buying your first home is not an investment, especially if it is your primary place of residence.

It only becomes an investment when you start generating an income from that property.
“Batswana need to redirect their focus from putting money in to liabilities such as cars and look at more sustainable investments like insurance, retirement planning, stock markets, unity trusts, offshore investment , property and bank savings.

“You cannot go wrong with investment in property, but you need to diversify your portfolio. You need to look at other investment so that you can satisfy all your needs as set from your investment goals” said Mbewe.


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