My submission this week is not to respond to or critique the contents of the budget. That part I will courteously ‘exit stage left’ and leave the experts and the economists and those mandated to do justice to it do so. I shall dwell on the interesting developments that the speech delivered and that could and will have some effect on our industry. Discussing some interesting aspects that were brought to the fore will stand us in good stead as bankers and the customers that we exist to serve.
Let us cut to the chase and deal with the elephant in the room first – the impending discontinuation of cheques which will be affected on 1st January 2024 in accordance with the budget speech. Bittersweet, I must say, but we need to be balanced in our discussion and appreciate that this will be big change and perhaps even a scary one for some clients. Comfort must also be derived from the fact that this is not some directive from the ministry but a decision that was arrived at after an extensive discourse between all stakeholders, including the Bank of Botswana and the Bankers Association of Botswana and many factors duly informed this direction. Of paramount importance is the fact that the whole world is moving away from use of cheques.
Despite a few advantages of this payment method, several challenges have been experienced, the most worrying being fraud perpetuated against banks and clients through cheques. We need to move to safer options to minimise this. There are other well documented challenges that we can go into and highlight but the point is made. Despite the challenges, from the principle of treating our customers fairly, it would be a bit irresponsible on bankers to blow the confetti yet because we have a lot of work to do in supporting the customer journey and ensuring that, come 2024, no one is left behind. The problems include low percentages of financial inclusion are real, which needs to be addressed. The uptake of electronic platforms is still very low in most banks. We were all betting on COVID-19 to help us move the needle but the uptake is still at undesirable levels.
A few reasons have been advanced as to why we are struggling in this area as a country, but we need to continue holding our clients’ hands, demonstrating to them how the electronic channels can do things better, how they are more secure, less costly and generally more convenient. I hope that we have dealt with the help and are on the same page. Let us make the remaining 23 months count and prepare for this development.
Can we talk possible opportunities for all? The government will be focusing on the maintenance of public infrastructure, with a proposed total budget of P3 billion in the coming financial year. The bulk of maintenance projects will be awarded to citizen-owned companies registered with PPADB. Secondly, the budget for Constituency Community Projects will be reserved for contractors in the immediate locality with the sole purpose of providing a focused fiscal stimulus throughout the country. We can all agree that the biggest challenge for many businesses is lack of capital to get going. The question then becomes as financiers how we make access to capital a much easier endeavour. Indeed, all the prudency and necessary checks and balances must be done to safeguard return on investment for our stakeholders. Do we review our credit policies and appetites to accommodate debtors and aid delivery of projects?
Another interesting development I gathered from the budget speech is the ongoing servicing of some lands – projects that are at various stages of implementation. Allocation of these serviced plots to Batswana will be carried out in the coming financial year, according to the minister. No need to elaborate on what this means to financial institutions, property developers and our clients who can finally own homes.
The enhancement of customer experience is key to survival of any business. Afterall, customers are the most important assets. We absolutely need convergence between some of our banking systems and certain government portals that can grant us access to customer information. We applaud the stakeholders for making e-KYC a reality as a step in the right direction for access to more information promoting financial inclusion efforts. We gather that the government is working steadily to achieve a digital economy that is catalysed by ICT, innovation and an agile policy framework covering advanced electronic services, increased productivity and efficiency.
There is still lot to talk about. Unfortunately, we cannot address of all of them here as we eagerly await finalisation of other key legal reforms presented to Parliament such as amendments to the Retirement Funds Act, the Bank of Botswana Act, the NBFIRA Act and banking laws. The economic outlook is a positive one and we pray that we do not get another curve ball thrown to disrupt our plans. Equally, let us hope and pray that the set objectives in the budget are achieved and the projects and initiatives are implemented.
LinkedIn: Gomolemo Kololo Manake