The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) says it is mindful of the possible effect that disinvesting from or reducing offshore investments may have on the local economy. In this context, the regulator has told The Business Weekly & Review that the change will be implemented and monitored in a prudent manner through planned transitional arrangements and consultations with all key stakeholders in order to enable the domestic market time to adjust.
Under the Retirement Fund Bill 2022, Pension Prudential Rules will be reviewed by increasing the limit of funds that can be invested locally by pension funds from the current minimum of 30 percent to a minimum of 50 percent. This will see P13 billion being injected into the economy. While finance minister Peggy Serame says this is to make funds held by pension funds available for developmental purposes in the country, contribute towards boosting the local economy and to create the much-needed sustainable jobs, experts have opined that this may have unintended consequences like inflating asset bubbles and suppressing bond prices. The crux of the expert opinion is that liquidity is adequate in Botswana, hence any influx of more funds into the country will mean too much cash chasing few assets. Experts have also argued that offshore is more yielding than onshore, which is why, they say, countries like Zambia and South Africa are pushing to increase their offshore limit.
This content is locked
Login To Unlock The Content!
