Alternative investments in Botswana: Building a future beyond tradition :: Mmegi Online

Botswana’s investment space for an average pension fund has historically been anchored in traditional asset classes, including listed equities, fixed income (bonds and cash), and local property. These investments have provided stability and predictable returns. However, with the introduction of the Pension Fund Investment Rules, 2023 (PFR2, 2023), the local investment landscape is undergoing a significant transformation.

Botswana institutional investors are regulated by NBFIRA and deploy investments within the limits on Pension Fund Rules 2 (PFR2). The updated rules introduce new allocation limits and timelines for repatriating offshore funds.

The initial PFR2 limited pension funds to investing not more than 70% of their capital offshore, while the revised version mandates a minimum domestic investment threshold of 50% to be implemented in a phased manner and to be completed no later than December 2027. The aim is to support sustainable domestic economic development by channelling pension capital into local capital markets and reducing over-reliance on international markets for returns.

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