Botswana Stock Exchange (BSE) and Gaborone City Council (GCC) want to let ordinary Batswana buy into the city’s future through bonds.
The two organizations recently signed an agreement, which will see Botswana’s first municipal bond.
What is a Municipal Bond?
A municipal bond is a way for GCC to borrow money from investors, including from ordinary people.
If you buy a bond:
- You give money to the city for some years.
- The city pays you extra money called interest.
- At the end, you get back the money you gave.
You become part-owner of the city’s projects, roads, schools, water pipes, and even solar panels.
“As we think about this municipal bond, at the center of it is the participation of the retail investor in helping transform the economic landscape of our municipalities,”
BSE CEO Aupa Monyatsi said during the signing ceremony.
“So it is important that we not only look at it as a way of transforming the landscape but creating and democratizing wealth for Batswana to participate in this journey.”
GCC is expected to use the money to:
- Improve public services.
- Upgrade city facilities.
Monyatsi said this is a bold step towards the realization of the vision that the Botswana Stock Exchange has long advocated for: the utilization of the capital markets to support inclusive, transformative development.
“It’s important to underline the word inclusive. One of the key pillars of our new strategy is to be inclusive and to democratize wealth.”
Examples From the World
- Chicago, USA
In 2023, Chicago sold $150 million in “Social Bonds.”
The money helped build:
- Houses for poor families.
- Shelters for homeless people.
- Parks and tree planting.
Bonds were first given to Chicago residents before banks and big companies.
2. Indore, India
In 2023, Indore became the first city in India to sell bonds to ordinary people.
- Each bond cost only 1,000 rupees (about P150).
- People could buy as little as 10 bonds (P1,500).
- The money went into green projects like clean water and better roads.
3. Cambridge, USA
In 2017, Cambridge sold mini-bonds for $1,000 each.
- Residents could buy up to 20.
Money was used for:
- Fixing school roofs.Putting solar panels on the library.
- Improving roads.
The bonds sold out quickly and even won an award.
4. Madison, USA
Madison sold “community bonds” in 2018.
- First chance went to Madison people, then the county, then the whole state, and finally the rest of the country.
5. Massachusetts, USA
- The state sold Green Bonds to clean water and protect the environment.
- Ordinary people bought $93 million worth of these bonds.
Read also: The Botswana Stock Exchange Wants You to Buy Debt You Can Sell
