seven. this is a welcome development for the botswana banking sector and the wider financial industry. i would, therefore, like to take this opportunity to implore capital bank to immediately make its presence felt in the domestic market and contribute positively to the promotion of a competitive, soundly - based and growing financial sector. as we are all aware, a major development challenge for many countries in our region is the need to increase the availability and access to high quality banking facilities and services at affordable cost to both businesses and households. not so long ago, a survey sponsored by a consultancy on financial sector issues, finmark trust, found that almost 57 percent of the population in botswana do not have access to any form of banking. in addition, the branch network, marketing and other banking services were found to be highly concentrated in urban and semi - urban areas. the survey also found that the criteria and the initial deposit required for opening a bank account were restrictive. as a result, large segments of the population could not gain access to financial services. the bank of botswana had also obtained credible evidence that the reasons for this undesirable state of affairs included very high transaction costs arising from, among others, high bank account maintenance fees and multiple bank changes, which were regrettably not matched by the quality of service. my appeal is made against the background of a public outcry with regard to the cost and quality of financial intermediation, as well as public perceptions of a lack of transparency, particularly in respect of bank charges. commercial banks continue to be regarded as not operating in conformity with their pledge to serve and deliver world - class service and satisfy market needs. overall, the banking industry is still considered to be solely profit - oriented, and interested only in high returns and not in offering high quality service. these findings suggest that it is imperative for all players in the financial services industry to turn the right corner and embrace a more “ financial inclusive ” approach in reaching out to the unbanked members of society. it is no secret that the high cost of banking services retard efforts to encourage financial saving and discourage full use of the banking facilities, at a time when banking is no longer a luxury but a need. while it is appreciated that the cost of providing banking facilities and infrastructure in a vast but sparsely populated country such as botswana can be significant, it is important that the level of banking charges should be seen to be commensurate with the quality of banking services. the bank of

same time, we must recognise that the impact will vary according to the specific circumstances of each region and country. one thing for sure is that the current financial crisis is unprecedented in modern times for its scale and catastrophic dimensions, and its full impact has yet to unfold. another defining feature of the crisis has been the pace and dynamism of its development, often in unexpected directions. it is less than two months since the collapse of lehman brothers on september 15, 2008, but it is not much of an exaggeration to say that this seems like a life time away. africa had initially appeared relatively insulated, both for its financial system and economic development more widely. but the continent can no longer be lulled by any sense of security that this is a crisis only for the developed world, and its banks in particular. globalisation has many benefits, but there are associated risks and, as the international monetary fund has repeatedly come up with lower forecasts for global economic growth, it is increasingly clear that developing economies will feel the chill of the looming recession. the commodities boom has come to an abrupt halt, and this is of particular concern to many african economies given the negativeimpact of reduced trade on balance of payments. panel members : mr kofi annan ( chair ), mr tony blair, mr michel camdessus, mr peter eigen, mr bob geldof, ms graca machel, ms linah mohohlo, gen olusegun obasanjo, mr robert rubin, mr tidjane thiam, prof muhammad yunus, mr michael keating ( director ). slowing world demand also undermines african countries ’ efforts towards diversifying economies away from primary sectors. as we are witnessing in botswana, even when investors wish to proceed with new developments, they are increasingly constrained by lack of access to credit. the so - called “ flight to quality ” where risk averse investors concentrate their investments in the short end of the yield curve, can destabilise financial flows. in the face of global financial markets, africa ’ s banking practices as well as related regulatory and oversight regimes cannot continue to remain local and, in many instances, ineffective. needless to add, investing foreign exchange reserves in volatile markets is an additional challenge which requires the establishment of prudent investment policies and guidelines, depending on whether the reserves are the minimum necessary for short - term import cover, or represent an accumulated stock of national savings ( e. g.