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FY 1999: Botswana |
CHAPTER VIII. TRADE AND PROJECT FINANCING The Bank of Botswana, the nation's central bank, was established in 1975 and is responsible for monetary policies, central banking services, banking supervision of financial institutions, issuing of bank notes, implementing exchange rate policies, administering exchange controls and foreign exchange reserves management. There are four major commercial banks operating in Botswana: Barclays Bank of Botswana, Standard Chartered Bank, First National Bank, and Stanbic Bank. All are geared to arrange finance for new businesses. Development Financial Institutions, six in number, offer specialized services to specific economic sectors. Short-term finance, including pre-and-post-shipment credit, is readily available through the commercial banking system at market rates of interest. Export credit insurance is available through local insurance companies. Foreign exchange is available to local importers upon proof of receipt of the goods and the amount of payment due. The provisions for U.S. and other foreign firms borrowing in Botswana are liberal while local banks remain highly liquid. The country's commercial banks, however, have difficulty making long-term credit available due to the short maturity nature of their deposits and small capital bases. At present, commercial banks finance only about one-third of the annual investment taking place in Botswana. Botswana has kept its external borrowing to a minimum. Outstanding public debt reached approximately $447.9 million in March 1998 while the debt to GDP ratio was about 10% (down from 15.5 percent in 1989). Moreover, the country's favorable balance of payments situation has meant that -- with one or two exceptions -- it has not been forced to borrow externally on commercial terms. OPIC's finance and insurance programs are operable in Botswana. Eximbank financing is available to exporters for exports to Botswana. Eximbank and OPIC have not, however, been active in Botswana in recent years. All four major commercial banks operating in Botswana have correspondent relationships with U.S. banks.[end of document]Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.