The Bond Market Association of Zimbabwe (BMAZ) and the Botswana Bond Market Association (BBMA) have signed a Memorandum of Understanding (MoU) to provide for on-going collaboration between the two.
In a joint statement, BMAZ and BBMA said they aim to enhance the capacity and capability of each organisation, and contribute to the development of bond markets in Botswana and Zimbabwe.
The key objectives of the MoU are to facilitate information sharing, including research findings, market insights, best practices and regulatory frameworks and to promote peer learning through mutual capacity building activities and other collaborative initiatives.
BMAZ and BBMA said the MoU expresses commitment to fostering collaboration and cooperation between the bond markets of Zimbabwe and Botswana.
“The bond market is pivotal in capital formation, mobilisation and allocation for development and infrastructure projects and we believe this partnership will assist Botswana and Zimbabwe capital markets in the delivery of critical public infrastructure,” the two wrote adding that “we have seen the growing need for Sustainable and Green financing in the continent and our countries will benefit immensely from well-functioning bonds markets”.
The bond market in Botswana is highly developed, largely due to the implementation of the Botswana Bond Market Development Strategy, which was crafted in 2011. The Strategy encapsulated all the structural impediments that needed resolution and provided a roadmap for addressing them.
Since then, the bond market has grown significantly: market capitalisation has increased by over threefold, the number of listed bonds has nearly quadrupled, trading activity has more than doubled, and new types of bond instruments have been introduced compared to those available in 2010, according to Kopano Bolokwe, the Interim CEO of the Botswana Stock Exchange (BSE).
He said this is a reflection of the reforms delivered by the Bank of Botswana (BoB), the BSE, the market participants at large, and most importantly the stewardship of the BBMA in driving the Bond Market Development Strategy.
For this reason, Bolokwe said Zimbabwe, whose bond market is relatively underdeveloped, has expressed a desire to learn from Botswana’s success.
From establishing and operating a Bond Market Association to delivering results that deepen the bond market, increasing liquidity, enhancing instrument diversity, making transaction costs competitive, and establishing the necessary infrastructure for thriving bond markets.
Bolokwe expressed eagerness to cooperate with them in this regard to assist other peers across the continent.
