In most of these countries until a few years ago there did not exist well-defined accounting principles and rules, and independent auditors were not available to certify financial statements and accounts of banking institutions. In summary, the public infrastructure for the management and running of modern banking activity did not exist and had to be established before modern financial market systems could be developed.
In a market-based economy such as Botswana’s, monetary policy influences inflation indirectly through its effect on interest rate changes, which then influence credit as a key means of financing expenditure on both consumption and investment. The effectiveness of interest rates in controlling credit is monitored closely.