In its sub-Saharan outlook released recently, the International Monetary Fund (IMF) noted that Botswana is among four African states, including South Africa, Zambia and Mauritius where British institutions held more than 30 percent of deposits.
For Botswana, these institutions are Barclays and Standard Chartered, which by 31 December 2011 held P17.2 billion in deposits and were owed another P10.2 billion outstanding loans by customers. The level of loans owed to Barclays and Standard Chartered by December 2011 was equivalent to 37 percent of total loans outstanding to all banks in Botswana. Rating agencies have downgraded several banks in France, Portugal, and the United Kingdom since September 2011, the latest being 16 Spanish banks. By Press time, international media was reporting a downtrend in the equities of listed banks in the UK and elsewhere in Europe, with investors opting out due to possible contraction. In its report, the IMF said despite the dominance of British banks in Botswana and other African states, the availability of funding for banks and their output of credit was unlikely to be affected by the emerging problems in Europe. The institution said the risk of contagion or the Euro crisis spilling over into Botswana and other states was lessened primarily by the fact that most countries' did not rely extensively on European bank credit lines. Only Cape Verde, Gambia, Sierra Leone and two others could significantly have project and other economic funding cut short as their under-developed financial markets mean they often fund large investment needs with lending from European banks.
