We support the BSE – Masisi

SHARE   |   Monday, 13 March 2017   |   By Mokgweetsi Masisi’s

The participation by different members of the capital market value chain reflects the key principle that underpins this Conference; which is the need to continuously develop our domestic capital market. The capital market is undeniably a key enabler towards the growth of our national economy, and therefore requires participation from all stakeholders. However, of all the stakeholders present here today, we are especially pleased to have with us the Small Medium and Micro Enterprise (SMME) owners, who are key to developing our capital markets through raising funds needed for the success of their businesses and our economy as a whole. SMMEs are part of the target sector for the Economic Stimulus Programme (ESP) that His Excellency the President has tasked me with leading. To date, over 300 citizen companies have been awarded tenders for ESP projects with a total of 18,789 people directly employed as at the end of January 2017. The expectation is that more are to be employed this current financial year. The theme of this conference “The Botswana Stock Exchange as a Gateway of Raising Capital” and the subsequent discussions to follow, are meant to enlighten and demonstrate to business owners that lack of capital from traditional sources can no longer be a limiting factor in the journey towards entrepreneurial success. In the past two decades, we have seen a global trend of enormous wealth creation by young entrepreneurs from all over the world. They have managed to build phenomenal businesses with a global reach, creating employment and significantly improving their standards of living, as well as those of their communities. All this is made possible by the business owners making the decision to raise capital through the capital markets in their respective nation states. All innovators should call on the Innovation Hub for their offerings and strategically link with the BSE for offtake.

This Conference comes at a time when we are facing economic challenges as a nation; due to the weak recovery of the global economy which, in turn, has caused pressure on some of our strategic business sectors. We have witnessed the closure of some mining businesses due to depressed global commodity prices; the most significant being liquidation of BCL and Tati Nickel Mines. This has adversely affected our national economy, communities near those mines and those who are now left without employment. There is however hope as prospective investors have shown keen interest in the BCL Mine. Three mines are scheduled to start operations during 2017 and we have witnessed an upsurge in diamond sales during the last two quarters. I am reliably informed that, the main aim of this Conference is to encourage as many SMMEs as possible to list on our Exchange. By so doing, such companies will be better placed to raise capital to pursue investment opportunities domestically, regionally and internationally. This will contribute to economic growth, creation of employment and improvement of the overall quality of life of the average citizen. We must be cognisant of the fact that the initiatives made to improve SMMEs and our capital markets do not only benefit business owners but ordinary citizens as well. They too, invest in listed securities and improve their personal wealth. By increasing the number of listings, the liquidity of our markets will be enhanced, thus attracting more participants to our capital markets. This will ultimately assist the Botswana Stock Exchange to becoming a World Class Securities Exchange; which will in turn attract Foreign Direct Investment (FDI). It is important that the private sector understand the emerging economic challenges to traditional industries and pursue other avenues for growth. This is particularly vital for an economy like ours, where the private sector is highly dependent on Government spending, which is unsustainable and not always reliable. The focus should be on strategic alliances with Government to create innovative and technologically-advanced and driven enterprises, with focus on sustainable value creation. In this regard, I implore the private sector to harness the benefits of renewable-resources, invest in research, innovate and nurture entrepreneurship as opposed to tenderpreneurship. This will go a long way in saving costs to businesses but also contribute to the long-term welfare of our nation.

With today’s conference, the SMMEs are afforded an opportunity to learn that possibilities are not defined by geographic boundaries. You will hear from Chief Executives of companies that have aggressively sought growth opportunities in sub-Saharan Africa; as well as from experts who have extensive knowledge of the African markets and the emerging trends and business opportunities arising thereof. Please pay close attention.
Investors throughout the world are always looking for opportunities, where the next big idea has the potential to change the business landscape. With an estimated middle class population of around 1.1 billion people by 2060, Africa’s projected population brings with it anticipated positive shifts in demand and consumption patterns. African markets are also becoming more accessible due to improving governance, political stability, economic growth and continued investment in economic infrastructure. Botswana, in particular, is working on her potential to becoming the next African powerhouse. The middle-class population of any nation, particularly, in a consumption economy like ours, is the most important driver of economic activity. The Rural Development Council is actively considering deliberately covering growth of the middle class throughout the country. It is imperative that the domestic private sector seizes this kind of opportunity to create capacity and contribute towards achievement of our economic goals. Our SMMEs, should harness the abundant opportunities presented by domestic and global economies. Our private sector, especially the SMMEs, should position themselves by listing on the Botswana Stock Exchange, in order to service the increasingly sophisticated needs of the growing middle-class in Botswana and further afield. Over the years, the Government of Botswana has demonstrated its commitment to the development of the capital market. This has been achieved by maintaining a stable macroeconomic environment whose main elements include sustainable fiscal balances, low inflation and a competitive exchange rate system. Furthermore, in support of the development of the domestic capital market, Government commenced a bond issuance programme in 2003, whose objective was to establish a risk-free yield curve that would facilitate wider bond issuance by both parastatal organisations and the private sector.

The issuance of the bonds, with their attendant costs, at the time when the country was running budget surpluses, demonstrated the Government’s commitment to the development of the capital market as a potential source of capital for businesses was serious and focused. Going forward, the Government will continue to support the Stock Exchange. Where necessary, funding for critical projects will be provided and the regulatory environment will be reviewed as and when necessary; timeously and appropriately. This is done to encourage the participation of more businesses in the Exchange. We are committed to working together with all of you to stimulate and catalyse new initiatives and avenues for business growth in Botswana and beyond our borders. Botswana is renowned for her consultative creed. A number of forums exist in the country where businesses are afforded an opportunity to contribute to major economic policy documents which include the development of medium term plans (National Development Plan 11) and the preparation of the annual budgets. Such an inclusive approach ensures that the input of key stakeholders in business is taken into account in the formulation of policies and strategies necessary for improving the ease of doing business. Consequently, Botswana is now ranked 71st out of 140 countries according to the Global Competitiveness Report of 2015-16, generated by the World Economic Forum. Our macroeconomic environment is ranked 9th globally and remains our competitive strength.

Allow me to applaud the visionary leadership of the Botswana Stock Exchange in pursuit of its vision of becoming a “World Class Securities Exchange, delivering innovative products and services”. It has adopted international best practice and affirmed its membership to the global investment community. Already, significant benefits have started to accrue to the Exchange. These have come in the form of: increased knowledge to drive innovation, potential strategic partnerships, and exposure to the world as an attractive investment destination. I encourage you to persist in your journey with the knowledge that you have Government’s unflinching support. In conclusion, I would like to urge you to participate dynamically in the dialogue that you will engage in today. I look to the business community gathered here to partake in the conference by learning and financing their dreams through the BSE. As Government, we would like to assure you that we will continue to work towards the creation of a political and economic environment that is conducive to investment and fosters business growth and economic development. We look forward to working with all stakeholders involved. With these remarks, I declare the 2017 Botswana Stock Exchange Listings and Investment Conference officially opened. 
This is part of Vice President Mokgweetsi Masisi’s opening at the BSE Listing Conference in Gaborone this week.