This is according to official figures contained in a statistical bulletin released by the Non-Bank Financial Institutions Regulating Authority (NBFIRA) recently.
The report says the growth in total sector assets is largely attributable to the retirement funds industry which continued to dominate the NBFI sector, accounting for 72 percent in 2021.
The statistical bulletin also shows that retirement funds assets stood at approximately P92 billion in 2020 compared and approximately P110 billion in 2021 (20 percent growth). “Lending activities, capital markets and insurance assets increased by 19 percent, 45 percent and 4 percent, respectively,” reads the bulletin.
It notes that within each NBFI sector, the total assets of all sub-sectors either remained constant or grew, except in capital markets. For this sector, asset management entities recorded the largest reduction of 22.5 percent from the previous P524 million, followed by management companies for CIUs with a downward shock of 6.7 percent from P45 million.
“Overall, the NBFI sector’s capital reserves increased by 8 percent from P8.1 billion in 2020 to P8.8 billion in 2021 and liabilities grew by 6 percent from P21.9 billion to P23.1 billion in 2020 and 2021, respectively,” sates the bulletin. According to the bulletin, the changes, were mainly driven by lending activities and insurance. With regard to capital markets, the statistical bulletin shows that they “recorded a decline in liabilities due to restructuring of one of the big asset managers during the reporting period”.
In other related issues, the statistical bulletin states that Botswana’s economy experienced a rebound from a negative growth rate of 8.7 percent in 2020 to a positive 11.4 percent growth rate in 2021. According to the report, the resilience is largely attributable to the country’s deliberate policy interventions and strategies to stimulate economic growth like the Economic Recovery and Transformation Plan, the National Development Plan 11 Mid-Term Review, COVID-19 vaccine rollout and the President’s Reset Agenda.
Sector-wise, mining was the main contributor to annual percentage change to real GDP at 30 percent in 2021 compared to a contraction of 27 percent in 2020. This is despite the fact that the mining sector was hard hit by COVID-19 travel restrictions. The bulletin says Botswana currently faces some socio-economic challenges of budget deficits, increased poverty, inequality and high unemployment rates amidst COVID-19 and geopolitical negative impacts experienced globally.
The country recorded a balance of payments deficit of P20.1 billion in 2020 compared to P2.9 billion in 2021. The unemployment rate remained high at about 24 percent between 2020 and 2021. Foreign exchange reserves recovered from P53 billion in 2020 to P56 billion in 2021. In his foreword to the statistical bulletin, the CEO of NBFIRA, Oduetse Motshidisi, notes that the report aims to disseminate information on the financial performance of regulated non-bank financial sector entities for use by the wider public, in particular, policy makers, regulated entities, regulators and researchers.
“The report provides industry aggregates for financial performance, financial position, capital adequacy and other key financial stability ratios of the Non-Bank Financial Institutions (NBFIs),” he says. “The published data were based primarily on audited financial information as submitted to the Regulatory Authority by regulated entities. In addition, other information on the financial sector and other global macro-economic statistics deemed to be relevant is included.”
