Proposes withholding tax exemption, subsidy for issuing costs and grant schemes to subsidise external review
Advises pension industry to consider special allocation dispensation
The Botswana Stock Exchange (BSE) has asked the government to give tax incentives for green and sustainable bond issuances, CEO Thapelo Tsheole told a bond market conference recently.
Tsheole hopes this will improve issuances in Botswana.
“It is very crucial that the market also moves into this development. It makes a lot of sense and we can only hope that sense will arrive at government like it did in other markets,” Tsheole said.
Tsheole noted that a lot of capital is targeting these instruments and as a developing country, he thinks Botswana needs to take advantage of some of the innovative products. The BSE approved a 25% discount on initial listing fees for sustainable bonds in July 2023.
Debt listings requirements were revised to introduce provisions for listing Sustainable Bonds which include Green bonds, Social Bonds, Sustainability Bonds and sustainability-linked bonds. New incentives for Environmental, Social, and Governance (ESG) asset issuance lifted Botswana’s score from 58 in 2022 to 59 in Absa’s African Financial Market Index 2023.
In his presentation at the bond market conference, Tsheole called for more incentives from Government and other Government agencies. He cited withholding tax exemption, subsidy for issuing costs and grant schemes to subsidise external review.
“The pension industry and regulator should consider making a special allocation dispensation for Sustainable Bonds,” Tsheole advised. He drew the audience’s attention to Ghana, where asset managers can exceed fixed income allocation by 5% if that excess is Green Bonds.
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