Wednesday, January 27, 2021

Take advantage of credit rating, Botswana told

Botswana has not been able to take advantage of its highest credit ratings by leading agencies, the Chief Executive Officer at the Botswana Stock Exchange (BSE) ÔÇô Thapelo Tsheole has said.

Two international credit ratings agencies,  HYPERLINK “http://www.moodys.com/” \t “_blank” Moody’s Investors Service and  HYPERLINK “http://www.standardandpoors.com/” \t “_blank” Standard and Poor’s (S & P), have awarded sovereign credit ratings for Botswana since 2001. The ratings reflect an overall assessment of prevailing financial and political risks. 

Apart from the domestic economy, Moody’s Services also rates two companies ÔÇô Letshego Holdings and state owned Botswana Development Corporation (BDC).

In June 2017, the London based rating agency assigned first-time Baa2/Prime-2 issuer ratings to BDC with a stable outlook on the Baa2 long-term ratings.

Moody’s Communications Strategist Abi Jones said at the time that the assigned issuer ratings reflect BDC’s standalone credit profile of b1, supported by its strong solvency and liquidity position. 

The BDC rating was in addition to Botswana’s A2 (stable) issuer rating acting as the “anchor” for potential support; and Moody’s assessment of a high probability of government support, in case of need, reflecting BDC’s sole government ownership

On Friday, Moody’s Services sent atleast six experts for a roundtable with local financial analysts and journalists in the capital Gaborone. The roundtable was also supported by the local bourse ÔÇô BSE.

Giving the welcome remarks at the roundtable, Tsheole urged the country to ensure that it takes advantage of the good credit ratings that Botswana is currently enjoying.

Tsheole said as it stands, Botswana has not done that adding that, “even countries that are lowly ranked credit wise, have been able to surpass us”.

Tsheole’s remarks come a few days after Botswana secured a P340 million grant from China that will be used for infrastructure development. The grant is seen as a sign of opening doors by China for future cooperation with Botswana with a possibility of issuing credit.

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