INSIDE THE ENGINE ROOM OF THE BSE: How Botswana Is Building Africa’s Next Capital-Raising Hub

Having witnessed much of this evolution first-hand, Mmolai discusses how technology continues to reshape the market, including the BSE’s exploration of tokenisation, while highlighting the importance of strong regulation and compliance in maintaining m arket integrity, credibility and investor confidence.

Now, Mmolai is helping steer the Exchange into its next chapter under the 10Xby30 Strategy , an ambitious agenda to significantly expand the scale, depth and relevance of Botswana’s capital markets by 20 30. With the market continuing to evolve and new technologies reshaping the global financial landscape, the focus is on strengthening the BSE’s competitiveness, broadening market participation and positioning the Exchange to respond to emerging opportuniti es while remaining anchored in the standards that underpin a credible and trusted market.

In this candid interview, Mmolai unpacks his mandate, his journey, and why the BSE is finally shaking off its elitist tag.

Q : How do you define the core mandate of your role as Head of Listings & Trading, and how does your day-to-day oversight safeguard market integrity while driving liquidity? A: Our mandate is to ensure t hat issuers are onboarded onto the Exchange in accordance with the regulations that safeguard the credibility of the market. We are also responsible for ensuring that once onboarded, issuers operate in accordance with their ongoing obligatio ns as given by the laws of the country and more specifically, the listings requirements. Further, we onboard Brokers and Dealers onto the Exchange platform in accordance with the Members Rules and ensure that they conduct their business of advising the pu blic and tradi ng on behalf of the public in an ethical manner. In cooperation with our Capital Markets Regulator, the N on-Bank Financial Institutions Regulatory Authority ( NBFIRA ) , we apply these market rules with a developmental mindset, keeping in mind that for the country and its people to progress and not be left behin d, for liquidity to improve, innovation has to be allowed to lead regulation. Q: Take us through your professional journey leading up to this role. A: My first job out of university was as an Investment Accountant at Botswana Insurance Fund Management ( Bifm ) , after which I took a d etour from capital markets into the insurance sector through a stint as a Branch Manager with Metropolitan Life. Eventually though I returned to capital markets by joining the BSE as a Listings and Trading Operati ons Officer in 2008. I have enjoyed the ch allenges and the impact from this sector as you can tell, and thus have settled here at BSE since, going through the ranks un till I was promoted to Head of Department in 2013. Q: What metrics or milestones do you use to evaluate the health of Botswana's tr ading environment? A: When I joined the BSE in 2008, we were trading physically. Now we have automated most aspects of the market, starting with the settlement and depository and ending with the trading. Now we a re working on tokenisation and onli ne order placement by retail clients. When I joined , we were a mutual organisation controlled by member brokers with a complicated corporate governance structure. Now we are demutualised and our corporate governance and m arket regulation is well harmonised with the World Federation of Exchanges. Our turnaround times for client service were haphazard at best. Now if you spoke to our clients and asked them, knock on wood, we have outperformed ourselves year in year out. We are now implementing the 10Xby30 St rategy! Q: How do you balance strict compliance with keeping the BSE an attractive, frictionless destination for capital? A: Issuers have told us that the reason they are happy to stay listed on our market is because we are disciplined in applyi ng the rules fairly and consistently. It seems to me therefore that our strict compliance enforcement is a selling point. I believe one of the reasons issuers are also happy with our market rule enforcement is because of our succ essful regular consultatio n process with all stakeholders. We believe that the market rules are a living compact with the market participants and they are given an opportunity to review them on a regular basis and come up with suggestions of how to make th em better. Our annual Req uirements Refresher Workshops play a big part in this harmony. Investors and the public rely on us to only list issuers that respect compliance and thus anyone that we list is able to receive capital from our investors as they hav e confidence in us. This i s the reason issuers choose us despite our strict adherence to the rules. We also work hard to improve our customer service so as to present a positive experience to our clients, enough to keep them coming back. Q: What systemati c approach are you using to nurture unlisted companies into exchange-ready candidates? A: Since 2018, we decided that we needed to pursue an inclusive approach to increasing listings. We realised that in Botswana, like everywhere else, the majority of bus inesses are SME a nd growth levels.

As a result, we decided to not just wait for companies to reach out to us when they are ready to be listed, we reached out to them through our Tshipidi Mentorship Programme for example. This programme really showed us th e huge potential in our SMEs. We have 80 graduates to date. Our Market and Product Development Teams really pushed specific partnerships which accelerated some targets to make their listing decision. We became open to all, we stopped giving that elitist v ibe so that every one in the market is now feeling ever more comfortable to ask us, how do I become part of the market? This has enriched the pipeline. Q: What are the most common misconceptions local companies have about listing? A: The biggest misconcep tion is that listing on an exchange has a high regulatory burden. Companies are also under the impression that it is prohibitively expensive to list. Others believe listing is only for 100-year-old elite companies. Even more believe it’s for profitable com panies o nly. We host listings workshops to teach anyone who is having these questions, including special board sessions if requested. Having the Mentorship programme also opened the eyes of the participating entrepreneurs and as a result they are thinking about l isting already and behaving like compliant corporates even before the listing happens. Q: The BSE is experiencing a historically healthy pipeline. What is driving this surge? A: Our sustained efforts over the years to educate local business peop l e about this thing called public listing are paying off. Banks are charging more for debt. Businesses have loaded up on enough debt and are now at a point where they need to raise equity capital. Some founders are also at a point where they are ready to r e lease equity. Whilst private equity is still available in abundance, exits have to happen eventually and we have successfully presented ourselves as the ideal option for these types of exits. Furthermore, and perhaps more importantly, both my Chairperso n Neo Mooki and CEO Aupa Monyatsi have taken deliberate strategic actions to convert the pipeline. It is clearly working. Q: How does a vibrant pipeline translate into wealth creation for ordinary Batswana? A: The level of activity on a Stock Exch ange is generally a representation of the level of activity in a nation. With more activity on our market, we expect it to lead to higher levels of job creation, the government will also be able to collect more taxes from the newly released liquidity, reta il inves tors and pensioners will receive dividends and recognise capital growth as price discovery improves. This is the theory and as long as the economic and environmental risks do not overpower the equilibrium, the market benefits the nation in this wa y. Q: F rom a macro standpoint, how does a deepening capital market accelerate GDP growth? A: The BSE is a Self-Regulating Organisation and we get our mandate from our regulator being NBFIRA. All the innovative policies and requirements that we e nforce are allowe d for by NBFIRA and thus we owe any progress to their wisdom in allowing innovation to lead regulation. A well regulated market will continue to deepen as it attracts more listings. A deep market mixed with positive government legislation will attract eve n more investors from across the world. More investors and issuers attract more jobs and tax revenues to our country. Q: How does your strategy support Government's diversification away from mineral revenue? A: Our 10Xby30 Strat egy aims to make the BSE a torchbearer for impact and our vision is to make our country the capital raising hub for Africa. If the capital markets sector grows significantly and we as a country become a serious alternative to Mauritius and South Africa for doing business in Africa, we will seriously start earning revenues from other sectors which are not diamond mining. Q: What innovative instruments are you championing? A: Over the years, and as part of the 10Xby30 Strategy that we are currently implementing, we have introduced s everal products to the market. However, it won’t matter how many products we as the regulator bring to the market if the participants do not stand up and implement them. We need participants in the market to play the rol es of sponsors, originators, market makers and arrangers for these innovative products so that the public can partake. Sustainability Bonds, Municipal Bonds, Quotation on the Serala OTC Board, origination of Exchange Traded Funds, all require the participa nts to issuer them on the BSE to th e public. We are further working on stabili s ing the Botswana Mercantile Exchange, introducing the BSE Mobile Trading App, establishing the Motheo National SME Fund of Funds and several other projects which we will announ ce in due course. Q: What legacy d o you hope to leave? A: The Tshipidi Mentorship Programme showed us that what we really need to do as a country is to pay attention to our SMEs and not only provide them with platforms for raising capital but al so give them serious business facilitation s ystems that will ensure that they become sustainable and investible businesses, not just tenderpreneurships. I hope that all the initiatives that we are working on will stabilise in 5 years and thus our quoted a nd listed companies will have a deep pool of capital from ideation all the way to the growth stages of their life cycle. When I see the BSE and Botswana in general being the capital raising Hub of Africa, then our work will be fulfilled.