Botswana is said to hold an important position in terms of regional and continental trading as it has the best sovereign ratings in Africa.
This is according to Standard Bank Regional Head for Investment Banking focusing on the Southern and Central Africa, Tandiwe Njobe.
Njobe was speaking this week when sharing insight with local media on how to further unlock the local economy’s potential for growth.
“In terms of infrastructure, Botswana is located within a trade route. From this point of view, Botswana is very key to facilitate trade!” noted the investment banker, adding that due to its connectivity to countries like Zambia, Namibia and Angola, the country plays a vital role in the regional trade.
While Botswana has found itself trapped in the middle-income category, Njobe said it was interesting to note how the country has been able to punch above its weight.
“There are a number of homegrown corporates who have a base here but have a growing and very successful regional presence,” she said, citing examples such as Letshego, Sefalana and Wilderness Safaris among others.
Njobe says when she looks across Southern Africa, Botswana demonstrates the ability to grow local brands into successful regional companies. Speaking alongside Njobe, Head of Investment Banking for Africa Regions, Anne Aliker said with the narrative of ‘Africa Rising’ the question has been raised as to why investors should focus on the African continent.
“I had a business meeting with investors in London, and the question they asked is, why should we invest in Africa?” According to Aliker, as much as that it is broad question, it is also a relevant question to Botswana.
“Botswana is a landlocked country but it has very loud voice in the continent and plays a critical role in this part of the world,” observed Aliker, adding that one of Africa’s biggest advantages is its youthful population.
“The demographic dividend is a very powerful aspect because we have a young population, and a young population means creativity, innovation and also the need to provide jobs,” she said.
The other thing she said stands out for Botswana, which offers great investment potential to the country, is that it is widely regarded as an ambassador of the continent.
“Notwithstanding some of the challenges we have seen on the ground, every single country has the challenges. So our role in Botswana is to partner with the companies that operate here, industries and government in order to support the growth of the continent,” explained Aliker.
A sovereign credit rating indicates the risk level of the investing environment of a country and is used by investors when looking to invest in particular jurisdictions, and also takes into account political risk.