Letshego Africa Holdings says the recent changes in Botswana’s currency, the pula, are a double-edged sword: the company faces increased costs, while on the other hand, shareholders may see the company bring in more money.
Letshego operates in 11 countries, but it reports all its results in pula. This means the company has to turn the money it earns in foreign currencies into pula. So when currencies move, the numbers you see in pula can go up or down because of fluctuations, even if day-to-day business in each country has not changed.’
Read: Where Letshego Makes Your Money
Where the changes help
Some places benefit when results are translated into pula. The CFO, Gwen Muteiwa, pointed to the “rand” markets—Namibia, Eswatini, and Lesotho.
“You’ve got the Rand market currencies, Namibia, Eswatini and Lesotho,”
Muteiwa said during the 2025 half-year results presentation.
Because of the changes to the pula, she believes that it is beneficial when it comes to reporting in Pula terms.
She added that, “the results that the group will be getting when translated into the pula, should give us more in terms of our income statement.”
In other words, when money earned in those countries is converted back into pula, the totals can look bigger than before.
Where the changes hurt
Not every place moves the same way. In Ghana, Muteiwa said the cedi (Ghana’s currency) has been strengthening against the US dollar. Because the group holds US dollar assets there, she explained that as the cedi appreciates, it reduces the company’s numbers when translated into pula.
In its 2025 first-half report, the group said the Ghanaian cedi has strengthened a lot against the US dollar. This meant that some of its US dollar bonds in Ghana lost value on paper, adding P50 million to exchange losses.
So Ghana can pull the totals down a bit when everything is converted back to pula.
How Letshego actually makes money
Most importantly, Letshego makes its money for shareholders by lending and charging interest. That’s the heart of its business. To lend to customers, it first needs to borrow money from local or foreign sources.
Why currency moves change costs
Sometimes, Letshego borrows in foreign currency, like US dollars, then uses that money in pula. As an example, the Botswana subsidiary borrows money in foreign currencies for its Botswana operations, according to Botswana CEO Kgotso Bannalotlhe, who was also speaking during the results presentation.
If the pula weakens faster (as government has set), it takes more pula later to buy the same number of dollars to pay back those loans. That pushes up costs even if the original loan amount (in dollars) didn’t change.
Because the changes to the Pula make borrowing foreign currency expensive, Bannalotlhe said the cost of borrowing may rise. The real exchange rate is about 7% higher than the official rate, meaning if they borrow foreign currency, they have to pay 7% more pulas. This means it costs shareholders more to get the foreign currency than it did before.
Read about the changes: Pula Weakening: Confidence Holds as a ‘Store of Value’
“We may face a 7% increase in interest costs… but it shouldn’t be something materially burdensome. It’s something we can absorb comfortably,”
Bannalotlhe said.
Because of this, Letshego may be cautious about taking on more foreign loans, since currency swings add uncertainty. Economists also warn that Botswana’s current challenges could prompt another adjustment to the pula, making the risks even higher.
As Bannalotlhe said, “The concern would be to the extent to which it may require us to evaluate taking any further foreign financing going forward”.
What the company is doing about it (risk control)
To avoid getting caught by surprise, the company uses two main moves:
- Lock in the exchange rate (hedging). This is like agreeing today on the future exchange rate, so paying back a $10 million loan in five years won’t suddenly cost a lot more pula if the currency weakens.
“By and large, the reason why you hedge is to make sure that occurrences of this nature do not affect your financial statements.”
- Borrow more money locally. Raising more funding inside each country means relying less on foreign loans, which reduces losses when currencies lose value.
- The company is promoting deposits from individual customers because they are cheaper than borrowing from large institutions. In Botswana, where interest rates have been rising, this approach is particularly valuable. Overall, the group’s deposits across its markets have grown by over 50% to P2.65 billion, providing the company with a reliable source of funds. This allows them to lend to clients at more affordable rates, making borrowing easier and more accessible. Botswana is yet to have a deposit-taking license
There’s also a smaller point: Letshego pays some suppliers in US dollars. With dollars in short supply in some of its markets, this could add a small extra cost as the company sources the dollars.
Read also: Where Letshego Makes Your Money, Letshego Keeps More After Tax: What It Means For Investors, Letshego Keeps Investors’ Cash Flowing
