NBFIRA participates at the Absa Private Equity Thought Leadership Forum

Dr. Kelesego Mmolainyane, Head of Financial Stability and Statistics at NBFIRA, recently contributed to a high-level panel discussion at the Absa Private Equity Thought Leadership Forum, held under the theme “Fostering Sustainable Economic Growth by Leveraging Alternative and Private Investment Markets.”

From the regulatory perspective, Dr. Mmolainyane emphasised NBFIRA’s critical role in creating a secure and enabling environment for private equity and alternative investments in Botswana. She highlighted that NBFIRA licenses Asset Managers specialising in Private Equity under the Securities Act, of 2014 and the Amendment Act of 2023 to ensure they operate within regulatory frameworks that promote market safety, soundness, integrity and stability.

Dr. Mmolainyane further highlighted that to date, NBFIRA has licensed six (6) Private Equity Fund Managers, marking significant progress in a relatively new investment space. She further noted that  the PFR2 allows Pension Funds to allocate up to 25 percent of their assets to alternative investments. This allocation is further broken down into specific asset classes: hedge funds 5 percent, local private equity 10 percent, offshore private equity 5 percent, and local infrastructure 5 percent. She emphasised that regulatory frameworks broaden participation in the private investment market beyond pension funds to include   institutional insurers and professional investors.

Reflecting on market growth, Dr. Mmolainyane shared that committed capital in private equity have risen from P510 million in 2021 to P3 billion in 2024. Drawdowns also increased from P260 million to P600 million over the same period. However, she pointed out that there remains a significant gap between committed capital and drawdowns, which calls for further exploration and action.

Overall, Dr Mmolainyane is of the view that there is need to review Botswana’s Public Private Partnership (PPP) model to promote sustainable economic growth by leveraging on alternative and private investments in both social and economic infrastructure PPPs.