Sunday, December 5, 2021

NDB appoints consultants to fast-track privatization

The National Development Bank (NDB) has reportedly appointed consultants to assist with its Commercialization Strategy leading to its pending privatization, which is in progress and is targeted for March this year.

Reports indicate that the Consultant’s principal task will be to assist the bank with setting out a solid and effective commercialization strategy. Once it has been successfully privatized and commercialized, NDB shall become Botswana’s only commercial bank, albeit with a majority shareholding remaining in the hands of government. Other ongoing processes which will inform the transition of the bank from operating through an Act of Parliament and with only one shareholder-government- is the interpretation of the Transition Act. The interpretation is done jointly by NDB, Ministry of Finance and Development Planning and the Public Enterprise Evaluation and Privatization Agency (PEEPA).

The executive management of NDB has pointed out that completion of interpretation of the Transition Act will be followed by finalization of the project schedule. As a private entity, five percent of NDB shareholding will go towards staff. The privatization and commercialization of NDB was herald by its inclusion in the Government Privatization Master Plan, which was effected in 1993. The bank’s transition from being a 100 percent government owned entity was put beyond late last year when the NDB Transition Act was subsequently passed by Parliament.

A tripartite arrangement will then be made, comprising Ministry of Finance and Development Planning; and NDB and PEEPA. The role of the tripartite will be to principally stir the various activities in the transition exercise.

Activities referred which fall under the oversight authority of PEEPA, include development of the constitution; conversion to a private company; listing and initial public offering at the Botswana Stock Exchange (BSE). There shall also be stakeholder engagement activities and the transition process is anticipated to take 2-3 years calculated from 2014. The privatization and commercialization of the bank is expected to unlock value in terms of offering more products and services such as deposits and household loans. An improved turnaround time is also envisaged to characterize the new-look NDB. Shareholders will also look forward to receiving improved dividends.

“A privatized NDB will not only give legitimate expectations for improved dividends but also raise capital and even direct it to other developments areas.”

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