BY KABELO SEITSHIRO
The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) says Botswana’s capital markets sector continue to experience serious delays when doing transactions internationally.
This is so because Botswana has been grey-listed for non-compliance to local laws and international best practices on Anti Money Laundering (AML).
As a consequence multibillion Pula Botswana offshore investments funds have been affected.
Information reaching the Sunday Standard is that the Botswana Public Officers Pension Fund (BPOPF)’s offshore custodial arrangement with France International Bank Group (BNP Paribas) as been affected. This led to the mandate being terminated. BPOPF offshore investment is estimated at P34 Billion.
NBFIRA Head of Anti-Money Laundering (AML) Motsisi Mongati said last week international transactions take time as financial institutions need due diligence when dealing with funds coming from Botswana.
“In capital markets every delay automatically affects profits the investor would have gained in that period of time,” said Mongati.
He also confirmed experiencing the de-risking and stated that one the country’s pension fund which has offshore investments, the custodian has given the instruction to terminate dealings a Botswana entity. This has resulted in the termination and withdrawal of the mandate.
“The country has generally not been compliant, even if NBFIRA, or BURS or CIPA comply, every entity involved in Botswana should collectively comply as country,” said Mongati.
Information from NBFIRA indicates that in the Retirement Funds industry, pension fund assets grew at an average rate of 10 % over the period.
The growth was predominantly driven by the 85% growth in membership levels, as well as rising income on investment and pensionable salary.
There were increased levels of investment in equities compared to other investment classes. BPOPF continued to constitute over 60 percent of total membership over the period.
NBFIRA is expected to play a supervisory role in ensuring the Non Bank Financial Industry (NBFI) sector’s compliance to laws and international best practices on the globally imperative issues of AML and Countering the Financing of Terrorism and Proliferation (CFTP).
He further stated that following the results of mutual evaluation the country was placed under one year observation period by the FATF in which it was to improve its technical compliance and effective implementation of its AML/CFT regime
The authority also confirmed being part of the collaborative nationwide effort working towards the de-listing of Botswana by the Financial Action Task Force (FATF/ICRG). International financial institutions are said to cautious when dealing with funds from Botswana.
At the end of 2018, Financial Intelligence Agency (FIA) Director Abraham Sethibe confirmed the country’s banking facility is running the risk of being negatively affected as foreign banks may decide to apply enhanced due diligence when dealing with transaction as a result of Botswana being grey listed for deficiencies on Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT).