The Impediments and Best Practice use of Derivatives in Zimbabwe, Botswana and South Africa

Abstract:

The research investigates into the impediments and the best practice use of derivatives in Zimbabwe, Botswana and

South Africa. The research has been based on a mixed method research approach. The significance of the study has

been to identify the gaps in the use of derivatives and the factors that have given rise to the gaps. It has been revealed

that Banks in Zimbabwe only use the simple forward agreements derivative to hedge risk. In Botswana only simple

forward agreements, foreign currency exchange swaps, credit default swaps and currency options are commonly used

by international banks as hedging instruments. In South Africa a broad range of simple and complicated derivatives are

fairly used, such as financial futures and options, as well as derivatives in commodities.