Govt raises P905m domestic debt

In talks: Finance Minister, Peggy Serame, says engagements are ongoing with the capital market over the lacklustre response to bonds
In talks: Finance Minister, Peggy Serame, says engagements are ongoing with the capital market over the lacklustre response to bonds

Government, through the Bank of Botswana, raised P905 million through the over-subscribed auction of three Treasury Bills (TB) last week.

Each month, the central bank auctions Treasury Bills and bonds to capital market participants as part of government’s P30 billion domestic debt programme. The last auction, conducted on July 30, did not feature the longer-term bonds, which have underperformed in recent months. The decision on which tenure of TBs or bonds to offer at each auction is governed by an advance calendar developed by the Finance Ministry and the BoB.
At the auction however, bidders showed strong interest in the securities on offer, with the 12-month TB attracting 10 bids worth P648 million for the P305 million on offer. The three-month TB received eight bids worth P550 million for the P300 million on offer, while the six-month TB had eight bids worth P440 million for the P300 million on offer. The TBs were all fully allotted, continuing a trend in recent auctions where investors have shown appetite for the shorter term securities offered by the central bank.

Yields on the three month TB declined marginally to 1.396% in the latest auction, from 1.408% in the previous, while the yield on the six-month TB fell to 1.505% from 1.509% over the same period. The yield on the 12-month TB dropped to 2.963% at the latest auction from 3.85% in January when the bill was previously offered. Trends in yields reflect the costs government incurs for securing debt from the capital market.
Editor's Comment
Seamless Business Environment Needed Post-COVID

The country was also classified as the least corrupt in the world with strong anti-graft checks and balances. With these assurances, investors were guaranteed safety on their investments and returns. That is no longer the case. Several countries like Namibia, South Africa and Mauritius have done well over the years and overtaken Botswana as attractive places to do business.Therefore, when countries that Botswana is competing with for a piece of...

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