To commemorate World Environment Day on 5 June 2024, Absa Bank collaborated with its partners at Enko International School to plant fruit trees that the school community will enjoy while contributing to environmental sustainability and combating climate change.
Absa highlights the importance of implementing environmental, social, and governance (ESG) market frameworks to enhance the investment appeal
Botswana has improved its ranking from 7th to 6th in the Absa Africa Financial Markets Index 2024, earning 59 points, up from 58 in 2023.
Listing Botswana's first sustainable bond on the Botswana Stock Exchange in December 2023 contributed to this improvement. The bond, issued by Absa Bank Botswana, was the country’s first domestically-listed sustainable bond and was aimed at financing affordable housing.
Graphics by Absa Africa Financial Markets Index
According to its Impact Report, the proceeds from the bond were allocated to affordable housing and renewable energy projects, aligning with Sustainable Development Goals (SDGs) 8 and 13 — Decent Work and Economic Growth, and Climate Action, respectively. The deployment of the bond’s proceeds has positively impacted 1,240 lives and created 280 jobs, among other reported outcomes.
The Absa Africa Financial Markets Index provides a standardised measure of the accessibility, transparency, and openness of financial markets across 29 African countries.
This year's edition highlighted the importance of implementing environmental, social, and governance (ESG) market frameworks to enhance the investment appeal of African financial markets.
It reports that 23 countries have now incorporated ESG measures into their financial market frameworks, marking a significant rise compared to previous years. Additionally, 15 countries provide incentives, such as tax breaks, to promote the issuance of ESG assets and encourage sustainable investments.
In Botswana, debt listing requirements were revised to include provisions for listing sustainable bonds, such as Green Bonds, Social Bonds, Sustainability Bonds, and Sustainability-Linked Bonds. Additionally, new incentives for Environmental, Social, and Governance (ESG) asset issuance increased Botswana's score from 58 in 2022 to 59 in the Absa Africa Financial Markets Index 2023.
“The increased awareness and capacity building around the issuance of Sustainable Bonds is gradually translating into tangible results,” the BSE said in its recent report.
"This is a commendable development as listing entities will benefit from fee incentives on the BSE by way of a 25% discount on initial listing fees and annual sustaining fees."
With some of the recent sustainable finance development initiatives, the BSE said it has now positioned itself as a one-stop-shop for sustainable finance, with services and products that extensively support ESG Investing, ESG Disclosures, ESG Ratings and a regulatory framework that is anchored on international best practice while sufficiently accommodating local market nuances.
Meanwhile, the Absa report reveals that Botswana’s stock market experienced the biggest rise in the year to June 2024 to 255% of GDP, from 140% a year before.
Graphics by Absa Africa Financial Markets Index
This was mainly driven by technical factors as some dual-listed large-cap stocks ‘traded for the first time in decades’ according to a local survey respondent, leading to improved price discovery and convergence with their international share price.
Botswana has the second-highest equity capitalisation as a share of GDP after South Africa, where it held steady at close to 270% of GDP over the past year.
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