Botswana Insurance Holdings Limited 2019 annual report

We have extracted below the Chairman’s Statement from the 2019 Annual report of  Botswana Insurance Holdings Holdings Limited (, listed on Botswana Stock Exchange

It has been 10 years since I assumed  Chairmanship of the BIHL Group and a great deal has happened in that time, including several years of significant upheaval and change. Overall, 2018 was a stable year; however, as years go, it had its trials. The Group’s subsidiaries – Botswana Life, Bifm and Legal Guard – were all hard pressed to achieve the satisfactory results that are reflected in this Report; but they did. In what appears to be becoming a trend throughout the Group, the second half of the year once again delivered a markedly improved performance over the first.  Batsho Dambe-Groth was appointed to the BIHL Group Board as an Independent Non- Executive Director and Chairman of the Human Resources Committee Under her leadership, the BIHL Group made an indirect acquisition of Botswana Insurance Company Under her stewardship the BIHL Group participated in landmark projects such as Rail Park Mall and Airport Junction Shopping mall.

The general state of the economy in Botswana remains a major challenge for the Group. As much as we see an improvement in the official GDP numbers, this does not appear to reflect the strain under which businesses and individuals are operating. The country’s unemployment rate, which has been inching upwards since 2015, reaching 18.1% at end-2017, is but one indicator of this.  Although still some way off the all-time high of 26.2% recorded in 2008, there are no indications that the upward trend reversed, or even slowed, in the review period. At the time of writing, the official unemployment figures for 2018 had not been released. However, the impact of the closure of the Selibe Phikwe BCL Mine in late 2016, and the ripple effect this had even beyond the mining sector, continued to work its way through the economy in 2018 Also of concern is the fact that more than one-third of our youth – 35.6% – are unemployed, according to the latest available statistics. This unacceptably high number has remained virtually unchanged at around the 35% mark since 2010. This is of great concern to the Group and is why much of the focus of our CSI efforts, through the BIHL Trust, is directed at youth; with particular emphasis on youth entrepreneurship and empowerment. The difficult economic conditions in the country are also reflected in the growth of household debt and the continual rise in unsecured borrowings, which currently stands at around 11% of all household debt, compared to 5% for secured loans. This suggests individuals are borrowing more, simply to keep their heads above water.

The prevailing conditions have clearly impacted the BIHL Group’s results, which have not yet started to fully reflect the positive impact of the restructuring that took place in 2017. This will only be fully realised in 2019, by which time we will have made considerable progress in attracting and grooming new and upcoming talent to fill the gap created by the loss of some skilled individuals as a result of resignations (notably at Bifm) as well as the restructuring. The loss of highly skilled individuals, at any level, although always regrettable, should always be regarded as an opportunity to bring in people with fresh ideas and different ways of thinking. This is as important to the Board of Directors as it is to the Executive team.  There is no doubt that the business is solid and well-placed to continue to look after Botswana’s policy holders and pensioners from a human capital perspective.

To avoid the risk of this comforting solidness morphing into staleness, the Group is aware of the need for ongoing innovation. In line with this, we are truly fortunate to have Sanlam, one of the largest and most innovative insurance companies in Africa, as a shareholder and partner. This relationship continues to deliver enormous benefit to the Group in the form of technical advice and staff exchanges that offer our people an opportunity to grow and develop their skills.  In addition, rather than resting on our laurels and continuing to do what we have always done, we are constantly looking for new projects and approaches, including ways in which to expand our portfolio of financial services products. 

A major highlight of the year was the bringing to fruition of the Bifm Citizen Share Scheme, which has resulted in 25.1% of the company now being owned by citizens from within the company. We took time to develop a solution that would deliver real value to citizen shareholders and the company. It has been a slow process, but we are immensely proud of the solution we have put together.  I am confident it augurs extremely well for Bifm’s future.

Operating Profit +12% to P375 million Embedded Value +3% to P4.42 billion. The last year was one of two trading halves. The first half which covered the pre- and post-election period, was characterised by initial positive consumer sentiment, and expansionary monetary and fiscal policies that drove consumer spending. The shortage of foreign currency became more pronounced in the second half thus compromised product supply. The fiscal and monetary policies implemented between October 2018 and February 2019 have significantly altered the trading environment. Of particular note is the 2% transaction tax, the adoption of the local currency (RTGS$) as the functional currency and the introduction of an exchange rate on the RTGS$. The cost of hard currency continues to escalate thereby driving inflation.  The acute shortage of foreign currency persists despite the introduction of the inter-bank foreign exchange market. We have outstanding foreign creditors and loans, the bulk of which is overdue. We remain engaged with our counter parties in this regard.

The Board is concerned about the company’s ability to access foreign currency in order to meet its external obligations. Strategies to mitigate this challenge are ongoing including contracting for additional barley to generate.

 The Monetary Authorities introduced the RTGS$ as the transactional and functional currency on 22 February 2019. The financial statements have been translated from the USD currency in line with the provisions of the international financial reporting standards and as informed by Statutory Instrument 33 of 2019 (SI33/19). The Board has therefore rebased assets and liabilities to reflect this change of currency as is more fully covered in the notes to the financial statements. The Board advises users of these financial statements to exercise caution especially on the Statement of Comprehensive Income which complies with SI33/19 but is not in line with International Accounting Standards as it is a summation of different currency values at the time of trade.

The Board

With a high percentage of Board members having been in their positions for over 5 years, this is an area to which the Board is devoting serious attention. The King IV guidelines indicate that members of Boards should not hold their positions for more than nine years, though Sanlam does not prescribe any time limit on Board membership. While the Board will continue to use the King guidelines in terms of financial governance and the composition of the Board, the BIHL Group Board has decided that when it comes to the longevity of Board members, we will take a different approach. It has been agreed that the performance of every Board member, including that of the Chairman, will be evaluated every year to ensure that we all continue to add value to the company.

The Group is fortunate that we have been able to constitute Boards at Group and Subsidiary level, of excellent, dedicated individuals with expertise in a range of technical areas that support the many facets of the Group’s operations. Board members are carefully selected for their ability to make a meaningful technical contribution to the organisation, not only in terms of their experience and expertise, but also for their willingness to devote time and energy to their roles. For example, among the reasons that our various oversight Committees work extremely well is that members make themselves available for meetings at all times, enabling rapid reaction to any situation that arises. This is why the selection of Board members can take time. We are currently in the process of looking for talented individuals with the right kind of expertise to fill a number of Board positions.


The BIHL Group devotes 1% of after-tax profit into CSI with projects selected and managed by the BIHL Trust. The Trust has been doing meaningful and impactful work in terms of poverty alleviation, education and the youth. There is a detailed overview about the Trust’s operations in this Report. Mrs. Batsho Dambe-Groth The BIHL Group Chairman It is worth noting that the BIHL Trust is now becoming a victim of its own success, as we are now at a point where we are fully utilising all funds available for the CSI commitments. However, the requests keep coming and we, sadly, have to turn down some. We will try, in the coming year, to review the Trust and ensure it can continue to meet its mandate.

Looking Ahead

Although Botswana may be heading into an election year, we anticipate that the political situation will remain stable and that whatever happens will have little, if any, impact on the Group. However, there is no getting away from the fact that there is a great deal of political and economic uncertainty in many other parts of the world – the United States, China and the UK – which could impact the Botswana economy and, ultimately, the Group as well.

There is little we can do about these external currents. What we can do is ensure that each Group Subsidiary is as well placed as possible to deal with any eventuality. In addition, we believe that it will be in the Group’s best interests to further diversify. To this end, we are continuously looking at other investment options to diversify our range of products and services. We also have confidence in the ability of our Associate companies to continue delivering on our investment in them. Nico Holdings in Malawi has stabilised well and seems set to continue on this path; under its new strategy, Letshego Holdings is well placed for a turnaround; and FSG continues to perform well in both Botswana and Zambia.


The BIHL Group is 44-years old, having first begun business in 1975. It remains the largest financial services group in Botswana today and this achievement would not have been possible without the loyal support of our customers. We thank them most sincerely for the trust they have put in us to take care of their investments so that they can look forward to a comfortable old age and true peace of mind. We are also extremely grateful for the loyalty and commitment of our Staff, who have gone through several turbulent years with passion, purpose and resolve. From a personal perspective, I would like to thank my fellow Board members for their unwavering support afforded to me, as well as their unstinting willingness to give their time and expertise to the Group. With the calibre of Staff, Executive team, and Board members we are fortunate enough to have, the future of the BIHL Group looks positive indeed.

Mrs. Batsho Dambe-Groth
The BIHL Group Chairman