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Govt funds secure under BoB – Minister

Govt funds secure under BoB – Minister

Finance and Economic Development Minister, Dr Thapelo Matsheka, says there has not been any concern raised regarding the safety and security of funds under the custody of Bank of Botswana (BoB).

Matsheka was responding to a question from Member of Parliament for Maun West, Dumelang Saleshando recently who enquired on the safety of the funds under the care of the central bank.

BoB acts as the official depository of Botswana government, commercial banks, foreign financial institutions and other central banks.

The minister told parliament that to date; the institution has performed all these duties to the satisfaction of government.

“Neither commercial banks nor any international financial organization has ever raised concern about the safety and security of funds under the custody of the bank,” said Matsheka.

Last year, the central bank was accused of negligence when it was claimed that P100 billion has been siphoned to benefit some individuals.

This was a claim which was denied by both government and the central bank with argument that reserves under BoB have never reached even the amount thought to have disappeared.

According to the finance minister, 98 percent of the bank’s assets are foreign exchange reserves.

He said the board has adopted sound Reserve Management Policies and Investment Guidelines for prudent management of the funds, including clear separation of duties for dealing, accounting and custody of funds.

Matsheka explained that for the foreign exchange reserves, 50 percent are managed internally by Bob while the other 50 percent is managed by 12 specialist fund managers.

Any reduction in foreign exchange reserves, the minister said, has been mostly due to government financing needs or deficit in the balance of payments which is when imports exceed exports.

Foreign exchange reserves movements are also determined by market valuation and exchange rate movements.

Regarding government transactions, Matsheka says in line with best international practice, BoB reconciles all the statements of the accounts it holds with external counter-parties with internal records.

It is said currently there is no outstanding reconciliation items on any of the banks’ accounts with its counter-parties.

“All the bank’s counter-parties holding financial assets, this is bonds, equities, cash on behalf of the bank required to confirm their holdings with the bank’s external auditors at each year-end,” said the minister, adding that there has been no issue to date.

When it comes to the maintenance of government bank accounts, the relations between government and BoB are governed by the bank of Botswana Act of 1996.

As a banker of government, he said BoB is empowered to receive moneys for government and disburse the same on behalf of government through the maintenance of centralized Treasury Singly Account which is commonly known as Government Remittance Account (GRA).

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