Corruption dominates dirty money risks in Botswana
Pauline Dikuelo | Monday November 9, 2026 09:28
This is according to the Financial Intelligence Authority (FIA)’s sectoral money laundering, terrorism financing and proliferation financing risk assessment covering the period 2021 to 2025, which found that the DFI sector has a moderate overall vulnerability to money laundering. The assessment identified corruption, fraud and tax evasion as the main sources of illicit proceeds, with corruption accounting for the overwhelming majority of the identified value.
Investigators discovered about 15 cases of fraud amounting to P19.8 million, while six cases of tax evasion amounting to P3,7 million were recorded as well as two unclear or unidentified predicate offenses valued at P610,107. The assessment found that DFI’s face moderate inherent vulnerability to money laundering, partly because of the size of their financial operations and the nature of their client base. The findings revealed that the sector’s exposure is particularly significant given that the Citizen Entrepreneurial Development Agency (CEDA) serves both individuals and legal entities, including politically influential persons and high-net-worth individuals, while the Botswana Development Corporation (BDC) deals exclusively with legal entities. “These categories of clients are generally considered higher risk because of their potential exposure to corruption and other financial crimes. The financial scale of the institutions further illustrates the potential exposure, with CEDA reporting an annual turnover of approximately P77 million, while BDC exceeded P436 million in 2025,” reads the report. The report further noted that CEDA occasionally facilitates payments for imported goods through letters of credit, while BDC maintains limited but existing exposure through cross-border relationships.
On institutional weaknesses, the assessment found that compliance functions lacked sufficient independence, while limited resources and reliance on manual monitoring and reporting systems undermined the timely detection of suspicious transactions.
Inconsistent independent audits, inadequate staff training and integrity breaches were also identified as areas of concern.
Governance shortcomings, including procurement irregularities, preferential lending, weak loan recovery mechanisms and inadequate oversight, further heightened the risk. The assessment further highlighted the absence of structured information-sharing mechanisms between DFIs and competent authorities, limiting cooperation in identifying and addressing suspicious financial activities.
At the supervisory level, inadequate resources and limited use of administrative sanctions were identified as constraints to effective regulation and enforcement. Despite the identified vulnerabilities, the assessment found no direct evidence of terrorism financing or proliferation financing involving the DFIs during the review period. However, terrorism financing and proliferation financing risks were both assessed as medium-low, with the report warning that high-value transactions, cross-border activities and diverse customer profiles could potentially be exploited. It also identified gaps in the implementation of targeted financial sanctions, institutional awareness and supervision.
The assessment was conducted using the World Bank's National Risk Assessment methodology, while the proliferation financing component was guided by the Financial Action Task Force's guidance on proliferation financing risk assessment and mitigation.
A working group led by the Financial Intelligence Agency, in collaboration with key anti-money laundering and counter-terrorism financing stakeholders, conducted the assessment.
The participating institutions included the Botswana Police Service, Directorate of Intelligence and Security, Directorate on Corruption and Economic Crime, Botswana Unified Revenue Service, Companies and Intellectual Property Authority, CEDA and BDC.
The report calls for improvements in automation, institutional resourcing, governance, customer due diligence and independent oversight to strengthen the sector's ability to detect and prevent financial crime.