Recent economic data from Botswana shows that the country is bucking the trend of surrounding Southern African countries, growing by 3.2 percent for the year ending in June 2017. One of the biggest non-mining sectors showing a lot of potential is the financial services sector, which had an interesting year.
To begin with, First National Bank Botswana (FNBB) and Bank Gaborone opened new branches; Ford Finance developed partnerships in Botswana, and the Southern African operation of Zurich Insurance, now known as Bryte Insurance, launched in Gaborone in February with the intention of expanding into other African countries.
Fintech is also taking root in Botswana, with companies like Direct Pay Online opening shop in April, while cryptocurrencies and mobile wallets are gaining more users and offering greater financial inclusion to consumers in the country.
This investment is good news for a sector that has demonstrated over several years that it is stable and robust. According to the African Economic Outlook 2017, Botswana has been making steady progress in increasing access to financial services for its population. Since 2009, the banked population has increased by 25 percent.
From a low base, cell phone banking rose by over 370 percent and Internet banking by 200 percent during the same period. This growth in the sector is good news, too, for employment, which continues to be a challenge for the Botswana economy.
While unemployment is starting to show a slight decrease according to the latest statistics, it is still considered to be too high at 17 percent. Botswana suffered historic job losses following the global financial crisis, especially in the mining sector. State owned enterprises have also retrenched hundreds of employees over the past decade.
The good news is that there are plenty of opportunities for accounting professionals in the country – the bad news is that there are not currently enough people able to take these up. The Botswana Institute of Chartered Accountants (BICA) says there is a huge need for chartered accountants, professionals and technicians.
There are currently 3,136 registered BICA members (1,223 accounting professionals and 1,913 being accounting technicians) which falls short of demand. The shortage means that Botswana has to import expatriates for accounting services. Many qualified accountants also leave the country to work overseas.
To take advantage of growth in this sector in order to reduce unemployment in the country, more needs to be done to ensure that people – especially young people – have the relevant skills and are encouraged to consider a career in the financial sector.
Many young people, for instance assume because they are not strong in mathematics at school that finance is not a viable career option for them, but this is in fact not the case. Many thousands of accounting students graduate each year around the world and many of them did not have an A-level in Maths when they started their studies.
So what can government do?
According to the African Economic Outlook, the Botswana government is already doing a good job of creating an enabling environment for business and ensuring good regulation and oversight of the sector – considered vital for its continued growth. The 2016/17 Global Competitiveness Report ranked the country 65 out of 138 in financial market development.
Government can also intervene more directly in targeted skills development such as it did in 2016, when the Department of Tertiary Financing sponsored 600 students in studies with AAT (the Association of Accounting Technicians) to equip them with skills to work in the fast-growing financial services market.
AAT is not new to Botswana. It is the UK’s leading qualification and professional body for vocational accountants and has offered its AAT Accounting Qualifications in Botswana to over 4,000 students a year – the largest cohort of students outside the UK – for 26 years.
AAT works with the Botswana Institute of Chartered Accountants (BICA), to give students the opportunity to gain practical skills that fast track their careers in finance - without the need to go to university or study for many years.
While government involvement is critical, the private sector and business networks also need to step up to create opportunities for employment and advancement in the industry – in the form of internships and other opportunities – or by investing in their employees directly to upskill them.
Such an approach benefitted Pyoka Mfuni, a manager at accounting and auditing giant Grant Thornton. Mfuni says that after finishing high school, he noticed that many jobs advertised were finance and audit related so he decided to pursue a career in the field.
“That was when I discovered the AAT course at the Botswana Accountancy College. It was shorter than and relatively as good as an accounting degree.” After successfully completing his studies he was able to secure a foot on the ladder that led to his current role.
It is possible to replicate this success story.
The World Bank report, Doing Business 2017, ranks Botswana among Africa’s best performers. For the second successive year, the country’s ranking improved, from 72 to 71 out of 190 economies (from 74 to 72 in the previous year), making it the third best performer in Africa. The country is poised for growth and with the right investment and training, its people can take advantage of this.The added advantage of investing in financial skills is not only will it boost the finance sector itself, it is also good for business and entrepreneurship more broadly, fuelling the growth of the economy in other sectors too.
According to the Global Entrepreneurship Monitor, Botswana has one of the most entrepreneurial populations in Africa, but a lack of financial skills is holding it back from making a greater impact on the economy.
The message is clear, investing in finance skills makes sense and should be a priority for business and government alike in 2018.
With wise investment and by working together, they can continue to ride the wave of growth towards low unemployment and a high tech future!