Business leaders in the domestic capital markets has on Thursday urged the government to increase its capacity of issuing bonds in the domestic capital markets to raise revenue for viable socio-economic mega development projects.
The call was made during the monthly BSE Opening Bell Ceremony held under the theme ‘Importance of Bond in Capital Markets’.
Kopano Bolokwe, Head of Product Development at Botswana Stock Exchange (BSE), said it was crucial for government to borrow in the domestic capital markets to avoid external debts. He said this is through issuing bonds in order to generate capital to finance infrastructural development, boost private sector and creation of employment.
Moreover, he expressed concern that the government’s issuance of bonds is very low as compared to the corporates which includes banks and the SMMEs as well.
Bolokwe indicated that currently government listed bonds are only seven as compared to the whooping 42 invested bonds by the Corporates, adding total listed bonds to 49 as of 2018.
“Government has not been doing well in issuing bonds in the stock market. The government bond contributes 6% of the GDP, which should at least be standing at 15% for efficient economic development,” he indicated.
Head of Investor Relations at Letshego Holdings, Boikanyo Kgosidintsi, contended that there is need to guide Monetary Policy framework within the domestic bond market environment, adding that lack of such fiscal legislations result in a very liquid market hence impeding efficient revenue generation despite buoyant local financial service industry.
Moreover, experts urged parastatals to list in the capital markets to generate their own money to finance their own projects, as this will reduce their vast dependence on the government for funding.
BSE CEO Thapelo Tsheole said the BSE has realised a significant increase on its market activity raising minimum of P7 million daily.
He also indicated that the total BSE trading volume has since increased by 20% which is a favourably boosting factor based on the fact Johannesburg Stock Exchange’s decline of 39%.
Tsheole expressed gratitude for the growing interest shown by local companies, including the SMMEs such as GetBucks Botswana for raising capital in the stock exchange. BSE has set a target of attaining 50 bonds to be listed by 2021.