�NBFIRA�s incapacity threatens industry�

Boitshepo Majube | Friday February 28, 2014 15:13

Contributing on the Ministry of Finance 2014/15 Committee of Supply presentation in parliament on Wednesday, Member of Parliament for Tati West, Charles Tibone said NBFIRA lacks capacity and should be supported to ensure that the assets of companies they are regulating are not hijacked by outside entities.

Tibone said assets under NBFIRA management at P56 billion represent half of the Gross Domestic Product (GDP), and it will be catastrophic for the country if they were to be hijacked.  “NBFIRA should be supported to ensure that companies assets are managed in the interests of Batswana,” he stated. 

He pointed out that there have been some worrying revelations in the media that some foreign entities are positioning themselves to hijack these entities. He cited BPOPF (pension fund) as one of those fund managers that are targeted. Presenting before parliament, Assistant Minister of Finance and Development Planning Vincent Seretse said NBFIRA continues to put in place measures to ensure the orderly growth of the sub-sector.

“During the period under review, there was a significant growth in assets under management held by asset managers and management companies of collective investments undertakings,” he said.

Seretse said as at 30th September 2013, these amounted to P56.9 billion, compared to P50.8 billion in the previous accounting year of 30 September 2012, an increase of P6.1 billion or 12%. He stated that to improve on the monitoring and supervision of non-bank financial institutions, NBFIRA is currently implementing the risk based regulatory IT system to support the migration to the risk based regulatory model. “The project, which is funded by the African Development Bank, is expected to be completed in June 2014,” he said. 

Seretse explained that the model is designed to ensure that the multiple financial risks encountered in each of the regulated sectors are adequately addressed.  “The risks relating to the contractual savings of Botswana and prudent risk-based supervision of pension funds are of particular importance,” he stated.

Seretse said the model for pension funds, annuities and life insurance companies will focus on identifying key risks, balancing the overall risks to which pension fund members are exposed, and giving an increased priority to systematic risk issues inherent in the sector.