Good morning, let’s get into it!
This new change to the Pula isn’t going to help companies, though; some companies are going to feel the heat because of their side of the devaluation. It’s not that the companies are going to lose, but more like they have a potential of seeing lower returns on their margins compared to previous years.
While the 2026 monetary policy is a "win" for exporters, it presents a complex challenge for the retail and wholesale sector, which is highly import-intensive.18 Sefalana Holdings and Choppies Enterprises, the two retail giants on the BSE, must navigate a landscape where a weakening Pula increases the cost of inventory, much of which is sourced from South Africa .19
Sefalana Holdings, which achieved record profits before tax of P550 million in FY 2025, has historically used geographical and sectoral diversification as a hedge against Pula volatility.19 With operations in Namibia (Metro), Lesotho, and Australia (Seasons Group), Sefalana earns a significant portion of its income in foreign currencies.19 The 2026 downward crawl results in a positive "currency translation difference" when these foreign earnings are consolidated into the Pula-denominated group financial statements.19
Moreover, Sefalana’s manufacturing arm, Foods Botswana, which saw revenue growth of 41 percent in 2025, stands to benefit from the import-substitution effect of a weaker Pula.19 As the price of imported maize and processed foods rises, Sefalana’s locally manufactured products become more attractive to price-sensitive Botswana consumers, supporting the national objective of economic diversification and food security.1
Sefalana Segment Performance | Revenue Growth (2025) | GP Margin (2025) | 2026 Policy Exposure |
Sefcash Botswana | +13% | 5.4% | High import cost pressure 19 |
Metro Namibia | +18% | 5.1% | Positive FX translation 19 |
Sefalana Lesotho | +7% | 6.1% | Stable regional hedge 19 |
Foods Botswana (Mfg) | +41% | 26.2% | Benefit from import substitution 19 |
Seasons Group (Australia) | N/A | N/A | Hard currency earner 22 |
Choppies Enterprises faces a similar but perhaps more acute challenge. The group reported that a 7 percent devaluation of the Pula in early 2025 had already increased the cost of imports, a trend that the 2.76 percent crawl in 2026 is expected to sustain.24 Choppies has responded by exiting loss-making markets like Zimbabwe—a sale that impacted FY 2025 profit after tax by 25 to 35 percent due to the reclassification of foreign currency translation reserves—and focusing on its core profitable regions in Botswana, Zambia, and Namibia.20
The 2026 policy shift toward asymmetric margins offers Choppies a tool for supply chain optimization. By utilizing the 3 percent buy rate, Choppies can more effectively manage its regional liquidity, moving funds from its successful Zambian operations—where revenue rose by 12.4 percent in Pula terms—to support its Botswana headquarters.25 Additionally, Choppies' strategic pivot toward becoming a "fintech company" and its technology overhaul are designed to improve operational efficiencies and reduce the paper and labor costs that are sensitive to domestic inflation.20
Source:
Sefalana Holdings: Performance across Botswana, Namibia, Lesotho, and Australia—including record profit forecasts and manufacturing revenue growth—is drawn from its 2025 integrated annual report and research notes.
Choppies Enterprises: Details regarding the 7 percent Pula devaluation impact on imports, the strategic exit from the Zimbabwe market, and the company's fintech transformation are sourced from its 2025 integrated annual report and CEO statements.
