The index, which gauges the performance of financial markets across 29 countries, ranked Botswana sixth in Africa, a run up from the seventh position held last year.
According to the AFMI report, African financial markets have been resilient to economic headwinds, with this year alone seeing improvements in countries’ sustainability considerations in finance, alongside growth in transparency and market depth.
“African capital markets have experienced remarkable development in 2024, indicating the continent’s dynamic economic landscape and favourable global financial conditions,” researchers stated. “In Botswana, the country’s first domestically-listed sustainable bond was issued in December 2023 by Absa Bank Botswana to finance affordable housing.”
Absa Bank Botswana successfully listed a P2 billion note programme on the Botswana Stock Exchange (BSE) last year, exclusively aimed at funding green and social projects, a move towards the first sustainability issuance on the local bourse.
By listing its note programme, Absa Bank Botswana is now in a position to regularly float bonds up to an aggregate of P2 billion. Documents filed with the BSE show that the bonds will be used for green, social, and sustainability bonds, fixed-income debt instruments designed to finance environmental or social impact projects.
This year’s edition of the AFMI compared financial markets across six pillars which include market depth, access to foreign exchange, pension fund development, macroeconomic environment, and transparency.
Botswana registered the greatest improvement in the macroeconomic environment and transparency pillar scoring 88 points out of 100, due to controlled inflation as policy instruments were used to contain inflation.
The report further noted that the local stock market experienced its largest market trade this year which saw the trade of a dual-listed stock.
“Botswana’s stock market experienced the biggest rise in the year to June 2024 to 255% of GDP, from 140% a year before. “This was mainly driven by technical factors as some dual-listed large-cap stocks traded for the first time in decades according to a local survey respondent, leading to improved price discovery and a convergence with their international share price” the report revealed.
The local financial market has seen more sustainability debt transactions this year, with Absa Bank Botswana and Stanbic Bank Botswana partnering in February to lend Norsad R680 million for financial inclusion as well as women and youth programmes.
In April, First National Bank of Botswana, through its corporate investment banking division, Rand Merchant Bank, extended a P105 million green building loan to Barloworld.
