The non-performing and bankrupt National Development Bank deserves to be taken off the banking radar as it is useless and does not help in the upliftment of Batswana’s lives especially Batawana whose cattle are shunned by lucrative markets and their agricultural products destroyed by the wildlife roaming the Ngamiland District.
In his contribution to the State of the Nation Address (SONA) in Parliament on Thursday, Maun East MP Konstantinos Markus painted a gloomy picture for his constituents who depended on livestock and agriculture for their livelihood and the country’s economy as well the quest to attain food security under the direction and financial assistance of the parastatal bank.
“The current structure and leadership of the bank is useless requiring only to be scrapped,” fumed Markus adding “the situation is even worse in our area because of persistent Foot and Mouth Disease”.
He said the situation was not helped by the NDB’s high interest rate, calling for its assets and liabilities to be ceded to the Citizen Entrepreneurial Development Agency (CEDA) which he argued was performing considerably well.
“The current crop of leadership and the general employees must be transferred to CEDA,” Markus advised, calling for the government to renege on the anticipated privatisation and commercialisation exercise of NDB.
“I say no to the commercialisation process. The bank is bankrupt,” the backbencher concluded.
Appearing before the Parliamentary Committee on Statutory Bodies and Public Enterprises recently, NDB’s Chief Executive Officer Lorato Morapedi pleaded with government to come to the rescue of the bank.
For NDB to privatise and commercialise it needs P1 billion in the next three years, P400 million in the next financial year, followed by two governments guaranteed loans of P165 million and P250 million in subsequent years, she said.
“The problems troubling NDB are caused by various factors among them its source of funding and inability to recover loans. We have been funding our loans from the money acquired from commercial banks,” Morapedi told the Committee.
NDB sources its funds from BIFM Capital, Barclays Bank and First National Bank Botswana (FNBB) at interest rates of 8.5 percent and 9.5 percent.
Morapedi conceded that the arrangement was not sustainable given the fact that they were also competing with commercial banks. She informed the Committee that NDB had approached government for subsidised funding.
She informed the committee that they wanted to bring on board an equity or technical partner as part of its commercialisation strategy.
The strategy will be similar to the one used by BTCL, in which government retains 51 percent in the entity and 49 percent is offered to the public and 5 percent to the employees.
Even after privatisation, NDB will continue to focus on agriculture and SMME funding to complement other government development institutions as Botswana Development Corporation (BDC) has since moved away from SMME funding, she said
Forty-six percent of NDB portfolio is Agriculture.
NDB reports to the Ministry of Finance and Development Planning as well as Bank of Botswana (BoB) for financial statements.
While NDB has been able to meet six- month deadline for the Ministry, it failed the three-month deadline requirement by BoB.