Background

As of January 2003, the financial sector in Botswana included the central bank (Bank of Botswana), five commercial banks, two investment banks and several non-bank financial institutions (the Collective Investment Undertaking, the Botswana Savings Bank, the Botswana Building Society, the Botswana Stock Exchange and various insurance institutions, pension fund management companies, leasing finance institutions, security dealers, merchant banks, trust fund operations and micro-lenders).

The Botswanan government has identified that the level of NBFI regulation and supervision is not in keeping with desired standards, and is thus interested in developing a strategy to supervise these institutions, particularly the private pension funds and institutions operating in the IFSC. Technical assistance in this area would serve as: (i) a catalyst for action by public officials with the cooperation of the NBFIs in the sector, detailing necessary steps for developing regulation and supervision of the NBFIs; (ii) a basis for development of regulation and supervision of NBFIs; and (iii) a strategy and action plan that will serve to define follow up TA to support implementation, legislation and regulation and capacity building.

Project

The GOAL of this project is the strengthening of the Botswanan financial sector.

The PURPOSE of this project is to strengthen the regulatory and supervisory regime of the non-bank financial sector in Botswana.

The project is designed to provide an initial assessment and strategy for strengthening the supervision of NBFIs in Botswana. It will assist the authorities in determining what supervision is needed, supervision priorities, and how supervision should be organised and situated. The project will consist of two phases. During the first mission, consultants will conduct diagnostics of current regulatory and supervisory practices and develop preliminary options and recommendations regarding the regulatory and supervisory structures. During the second mission, an action plan will be elaborated that makes practical suggestions on steps required to set up an effective and sustainable regulatory body.

The key ACTIVITIES/OUTPUTS include: (i) An assessment of the existing operations of principal industry participants and recommendations as to which NBFIs should be supervised; (ii) A detailed action plan, agreed with the authorities, on the steps needed to strengthen the system for the supervision of NBFIs and possibly, including the creation of a new body to supervise some or all of the NBFIs in the country; (iii) Detailed proposals regarding new legislation, and amendments to existing legislation, needed to create the new supervisory authority, if deemed appropriate.

Project Documents

Project Completion Report Summary
(100KB)

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