Bank of Botswana officially opened its refurbished headquarters today 47 years after it issued into circulation its own national currency, Pula banknotes and thebe coin.
“This historic and momentous day was on the back of a far-sighted, transformative decision by the Government as announced by the founding President of this Republic, Sir Seretse Khama, at a Kgotla meeting on September 6, 1974 in Molepolole that Botswana would leave the Rand Monetary Area and establish its own, full-fledged central bank and national currency,” said President Mokgweetsi Masisi, in official opening remarks.
He said, “As subsequent developments and history would show, this proved to be one of the most well thought-out strategic, timely and forward-looking decision for it allowed the then young democratic country discretionary power, capacity and control over an important lever of policy making to address Botswana’s development needs.”
According to officials, this meant that, for the first time in history, Botswana was able to formulate and implement its own monetary, exchange rate and financial policies, contributing to the country’s sound macroeconomic environment and investment climate.
The thought process was encapsulated in the Report of the Monetary Preparatory Commission culminating in publication of Government Paper No. 1 of 1975, “A Monetary System for Botswana.”
The outcome of this work was promulgation of the Bank of Botswana Act and Financial Institutions Act, and subsequent establishment of the Bank of Botswana on July 1, 1975, opening its doors to the public on January 1, 1976; issuance of our own national currency, Pula banknotes and thebe coin on August 23, 1976; and development of the country’s financial sector infrastructure.
The opening of these new premises of the Bank of Botswana was used by officials to reflect on what those developments in 1976 meant for Botswana and its people.
It was about addressing the development, social upliftment, as well as living standards for nations and their citizens is what could be termed the macroeconomic policy nexus: the mix of fiscal, monetary and external sector policies, notably the exchange rate policy framework.
In addition to political and governance autonomy, national independence in 1966, gave land locked Botswana control over fiscal policy, essentially revenue raising and spending choices, albeit initially anchored on Grants-in-Aid support by the British Government.
With the discovery and mining of diamonds, Botswana was able to bolster its self-determination in using fiscal policy to chart its development path: that is, determining its own revenue mobilisation framework (taxation structure) and expenditure allocation (spending decisions).
Annual budgets were anchored on six-year National Development Plans. Thus, Botswana was able to plan and execute infrastructure projects, and establish national institutions to facilitate the provision of services, regulatory frameworks, and their enforcement, escaping the so-called “resource curse”.
A big driver of measured economic growth (GDP) in early years of independence was government spending on infrastructure (roads and buildings), provision of utilities (such as electricity and water production and reticulation, and telecommunications), facilities for social services (health and education), as well as support for agriculture (at the time a key source of livelihoods of Batswana).
Notwithstanding, in the absence of a central bank and monetary independence, there was a gap in the discretionary policies needed to pursue and achieve the nation’s development agenda. Specifically, we lacked autonomy in formulating monetary and exchange rate
The Bank of Botswana ensures supply of good quality banknotes and coin, which are maintained in a clean state with adequate safeguards against counterfeit. Secondly, ensure the flawless operation of the payments and settlement infrastructures, channels, and platforms for conduct of transactions using the Pula and its representation in other payment formats.
Thirdly, through the conduct of monetary policy and maintenance of price stability ensure that the value of wages, profits and other incomes are not subject to rapid erosion by inflation.
Fourth, by managing foreign exchange reserves and implementing exchange rate policy ensure seamless exchange of the Pula for other currencies to pay for imports and other external obligations.
Fifth, the Bank of Botswana, along with others, ensures patronage of the domestic financial sector through maintenance and enforcement of regulatory and supervisory frameworks.
“In so doing fostering sustained and effective role of the sector in supporting economic activity through its various roles of enabling savings and provision of credit (that is, financial intermediation); facilitating the conduct of transactions and enabling International trade; and providing wealth management, custodial and risk mitigation services,” said Masisi.
He said, “What is important, in this regard, is that such patronage reflects trust and confidence in transacting and making valuations in Pula (Botswana currency).
The key deliverable for Bank of Botswana is contributing to macroeconomic and financial stability such that economic activity thrives; in turn, that the purchasing power of financial rewards to economic activity, in terms of profits, wages and other incomes are not eroded by rapid increase in prices, that is, high inflation.
The assurance of low inflation and prospective real returns also promote domestic investment and enterprise and, therefore, potential growth in employment. A rate of increase in prices lower than or comparable to other countries also means that, over time, the domestic industry could maintain price competitiveness in foreign markets and against imports. Additionally, the value, trust and confidence in the Pula is also reinforced through continuous availability of clean Bank notes and coin, maintenance of integrity of payments systems and availability of foreign exchange for international trade, all under the stewardship of the Bank of Botswana.
This is important because in October 2017, the Board of the Bank approved the redevelopment of the Bank’s Headquarters building and completed exercise after unexpected delays.
The building programme was, interrupted by the outbreak of the COVID-19 pandemic in early 2020, which, together with the resultant supply bottlenecks and logistical disruptions, delayed the project by approximately eight months.
Subsequently the outbreak of the Russia-Ukraine war and the energy shortage in South Africa added to the procurement challenges and risks. Thankfully, the initial pre-planning and scheduling of deliveries for the project helped the Bank to successfully manage the risks.
“Ultimately, a decision was taken to retain and embed the history of the Bank,” said Pelaelo.
The new building envelope provides new aesthetic articulation, a more consistent image and is a key element of energy-efficiency. Two existing office buildings and one new block, each 5 storey’s high, house the conference centre and public facilities at ground floor, and the offices as well as supportive workspaces on upper levels. Building support facilities include covered car parks; a waste management and processing area; storage; and the former vault repurposed as an archive and an energy centre.
The new facility will have extensive solar photo-voltaic panels on all major roofs and part of the parkade, reducing reliance on BPC power and possibly offload to the national grid during weekends, when there is low internal demand.
Through the combination of energy-saving technologies, passive climate control via the building envelope and photovoltaic power generation, the core building will achieve carbon Net-Zero status.
“The spaces between the buildings are landscaped courtyards or internal connecting spaces, which amplify natural lighting, allow for improved circulation of staff and better horizontal interaction, and promote organizational cohesion,” said Moses D. Pelaelo, Governor of the Bank of Botswana.
He said, “A modernized and digital “banking hall” serves Government revenue collection and direct processing into government accounts at the Bank of Botswana. Staff welfare is well provided for, with the staff cafeteria and gymnasium, a clinic, and offices for staff organizations.”
Building support facilities include covered car parks; a waste management and processing area; storage; and the former vault repurposed as an archive and an energy centre.
An arts integration and curatorial initiative linked to the project forms part of the cultural dimension of the Bank’s corporate social responsibility. On the environmental front, the new facility will have extensive solar photo-voltaic panels on all major roofs and part of the parkade, reducing reliance on BPC power and possibly offload to the national grid during weekends, when there is low internal demand.
Through the combination of energy-saving technologies, passive climate control via the building envelope and photovoltaic power generation, the core building will achieve carbon Net-Zero status.
“Ultimately, a decision was taken to retain and embed the history of the Bank,” said Pelaelo.
It was decided to remain in the current location, to optimally retain and repurpose existing buildings, and thus maintains the campus-like configuration of multiple buildings, albeit extensively modernised and equipped with state-of-the-art services installations, smart technologies, an advanced building management system and a Tier 3 data centre, all in support of operational efficiency of the Bank.
