Pension Funds must invest locally
Currently some Pension funds employ a handful- Maphongo
Gaborone City Council Mayor, Thata Father Maphongo says Botswana must make it compulsory for Pension Funds to invest their funds locally, so that “we can borrow locally for infrastructure development”.
Maphongo made his intervention at last weeks’ two- day Budget Pitso called by the Ministry of Finance and Economic Development, during a discussion on building economic buffers post COVID- 19.
Maphongo said this will promote the money market industry, increase employment, both at asset/ fund manager’s point and at projects level as these projects are undertaken and that the pension funds will as well benefit as more members will enrol. Maphongo who is a financial expert argued that equally important is that there must be better coordination of constituency projects as a lot of money is given but currently these are too fragmented, and better coordination could add economic value. He said another way of maximising profits is through utilisation of the PPPs, as well as putting more emphasis on the Local Economic Development to resuscitate the informal sector and small businesses as studies have proven that this is where most employment can be created. Talking on financial self- sustainability, he said there is need for council to expand its revenue base to enable it to fund some of its projects and access funding from the market to attain some autonomy.
Maphongo said the impact of the pandemic showed significant disruptions to productive capacity and consequent loss of income in certain key sectors of the
economy. He said from GCC’s side, the rates collections are at its lowest point because businesses and individuals have not been generating enough business to cater and cover most of the expenses. Maphongo said the establishment of Special Economic Zones ( SEZs) will unlock the city’s potential by harnessing locally existing productive factors in the form of land, capital and labour. In an effort to enhance productive capabilities, the city has identified open spaces that will be allocated to ward development committees for management in partnership with the private sector. There is also the development of parks by the council in collaboration with private sector to provide conducive environment for recreational activities. He said GCC is also reviewing the spatial plan to ensure that Local Economic Development projects are initiated allowing creation of employment in the process.