Saturday, October 24, 2020

BTCL IPO has exposed Botswana’s lack of interest on financial education

The upcoming listing of the Botswana Telecommunications Corporation Limited (BTCL) shares at the Botswana Stock Exchange (BSE) has served as a reminder of the negligence that our country has towards its current and upcoming generations. It is quite clear that over the past years we have dragged our feet as a country when it comes to working towards an improved financial education of our people.  

Despite media reports this week that the BTCL sale of shares has received positive response, the truth of the matter is that it comes at a time when a vast majority, even amongst the educated populace in Botswana, does not have a basic understanding of financial principles.

This is so despite the fact that it has been clear, atleast after the 2008 recession that the need for financial knowledge has taken a global centre stage. We had thought after the 2008 global financial crisis the government or any interested party would work tirelessly to ensure an improvement in the financial education of our people starting at the very elementary levels.

We all ought to agree, atleast to disagree that for real economic prosperity of Batswana, a simple recipe is required. Some consumption must be postponed ÔÇö it’s called savings. These savings must then be invested to expand the production capacity of the economy, which will lead to more production in future. But what is quiet clear at the moment is that most individual household’s budgets are not contributing to our country’s savings and investment ‘tank’.

This is partly due to financial illiteracy among many people of this country who are struggling with large amounts of debt, leading to negative repercussions on their development and well-being.

Yet again, we all ought to agree that creation of a wealthy Botswana nation is what should matter most, but financial illiteracy seems to be amongst key underlying factors hindrance as far as we are concerned. Wasteful and irregular expenditure is rampant and has been well documented amongst our people. All these can be attributed to financial illiteracy atleast according to experts in this field.

While we learn from the listing of the BTCL at BSE, we at the same time hope that our legislatures will soon see the need to advocate for the introduction of financial literacy training in our schools ÔÇô a move that we strongly believe will bolster financial knowledge of our future generations.

There is no single doubt that the root cause of poverty and unemployment among indigenous Batswana is undoubtedly a result of the many misguided and unsustainable citizen economic empowerment programmes that our government has pursued over the years. These policies include those that failed to include financial literacy into our schools curriculums.

At this very juncture, it is quite evident that for those citizens that are lucky to have jobs and earn a few Pulas at the end of the month end up with zero gains. (Hand to mouth scenario). This is partly due to lack of understanding of finance matters – Without basic understanding of finance, wrong and misinformed decisions prejudicial to businesses and homes are regularly made.

In wake of this sad reality, we therefore challenge the current government and all interested parties to consider fresh ‘citizen-building’. Citizen-building involves providing people with the required skills to gather, understand and analyse evidence about the contexts and institutions that affect their lives ÔÇô particularly their economical lives. The listing of the BTCL has really shown how much most of our people are lacking basic knowledge with regard to capital markets, a safer way of investing for the future. With financial access and education our children and youth can learn to save and spend money responsibly.

The truth of the matter is our people need knowledge, support, services and opportunities in order to thrive financially.

In the meantime while we push for an inclusion of financial education in the school curriculum we equally argue the government, major companies and even small businesses to ensure that more of their staff, other than the finance director and accountant, has basic financial knowledge. This could be done through in-house financial training which some companies such as the Commercepark based financial firm, Premier Wealth provide service for.

It is quite evident, atleast from their discussions on social media such as Facebook and Twitter that our youth are frustrated, they are hungry BUT they are willing to learn.

As such we strongly believe that well-designed financial education initiatives can reduce demand-side barriers to more effective financial inclusion and can empower vulnerable individuals economically, so that they can better manage household resources and develop income-generating activities.

A lack of basic financial understanding could lead to wrong choices that could affect both a person’s career and personal life. Some of the common problems people with low financial literacy experience is that they do not understand the importance of investing and saving for the future. Questions coming from the members of the public in the Facebook page of both BTCL and government leave a lot to be desired.

Perhaps this explains why Botswana for a very long time have been recording the lowest levels of savings per household and one of the highest levels of debt per household in Africa.

This alone should be a good reminder to us that we to improve the level of financial literacy among our people including those that live in the most vulnerable parts such as Qangwa and Xaxa in the Ngamiland district.

The #Bottomline though, is that improving financial literacy and access investment opportunities may help most of our people to save, allowing them to meet current financial needs and invest in their futures. 

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