inBUSINESS Issue 12

Stanbic Bank Named Best Bank in Botswana
BY ONONOFILE LONKOKILE
Standard Bank
Group and
Stanbic Bank
Botswana have
been named
the Best Bank
in Africa and
Best Bank in Botswana
respectively by Global
Finance magazine as
part of their 24th annual
awards.
Chief Executive Officer
of Stanbic Bank Botswana,
Leina Gabaraane, said
the recognition proves
their pledge to providing
significant and quality
financial services in the market. He explained
that it is through their efforts at supporting
economic activity in various sectors across
the country that they are acknowledged.
Gabaraane pointed out that Stanbic Bank is
committed to immproving and doing more
to make progress real.
“We, therefore, believe this award clearly
demonstrates our capability and expertise in
the banking sector in Botswana and Africa.
Awards like these are not just a mere pat on
the back but pay homage to all those who
help the bank move forward,’ said Gabaraane
In determining the winner of the
award; analysts, bankers
and corporate financial
executives were consulted on
aspects that include growth
in assets, profitability,
geographic reach, strategic
relationships, new business
development and innovation
in products. In addition, the
opinions of equity analysts,
credit rating analysts,
banking consultants and
others involved in the
industry were taken into
consideration.
Editor of Global
Finance Magazine, Joseph
Giarraputo, explained that
they are celebrating financial institutions
which excel at delivering good customer
service and products tailored to meet their
needs. Giarraputo further said the banks may
not be the biggest or oldest but their energy
and adaptability make them stand out in
their fields.
SA’s Downgrade is Bad News for Botswana - Analysts
BY ONONOFILE LONKOKILE
The good news is for businesses that import
goods from South Africa to Botswana as they
buy them at lower prices because of the pula
to rand exchange rate. However, researcher
and analyst at Motswedi Securities, Garry
Juma, has warned that in the mid- to longterm,
this joy could be short-lived.
Juma says this in relation to South
Africa’s current economic status and credit
downgrade of the neighbouring country‘s
economy by Standard and Poor’s(S&P) early
this month.
S&P’s downgrade of the economic giant was
prompted by political risks that the rating
agency said would remain elevated and that
policy shifts that could undermine fiscal and
economic growth were likely.
Juma says in the mid-term, South Africa’s
cost of capital, interest rates and services
will increase. But the main impact of the
downgrade will be an increase in risk
premium, meaning an increase in interest
rates because of increased default risk.
According to Juma, the general economy
might suffer, leading to commodity prices
going up, a pinch that would also be felt in
Botswana. He notes that some cushion exists
in Botswana‘s attempts to reduce dependence
on South Africa.
Examples of this include Botswana Oil to
ensure efficiencies in fuel supplies in the
event of shortages or price hikes in South
Africa and Botswana’s dry port in Namibia
as a substitute for goods coming through the
traditional Durban route.
“While Botswana might not
feel the effect of South Africa
downgrade immediately, a crash
on the Johannesburg Stock
Exchange would have rippling
effects on the Botswana Stock
Exchange,”
“The current economic situation in South
Africa is also likely to have investors keep
away from the southern African region.
Further, Botswana is likely to import
inflation from South Africa. However, job
losses cannot be ruled out in long-term,
and companies may move their investment
elsewhere.
According to Juma, rating agencies like
S&P act as indicators to investors regarding
the state of a country’s economy. In 2016,
S&P rated Botswana A- Investment Grade
for short-term bonds denominated in both
domestic and foreign currency. This had
investors view Botswana in a positive light of
stable and sustainable.
Meanwhile, the Chief Economist of
Standard Chartered Bank Africa, Razia Khan,
has been quoted as saying underperformance
in South Africa will definitely impact
negatively on trade in the southern African
region which will in turn affect Southern
African Customs Union receipts, thus
directly impacting on Botswana. She noted
that the Botswana economy was volatile
because of political instability in South
Africa.
This was in addition to the fact that
Botswana was underperforming relative
to other middle-income countries because
its economy was dependent more on the
government rather than the private sector.
“The private sector also has a role to
play in growing the economy,” Khan said.
“It should be a driver of the economy …
The government also needs to do more to
expand the contribution of all sectors of the
economy.”
www.inbusiness.co.bw | Issue 12 | 2017 7