NDB plots to return to profitability
National Development Bank (CEO) Chief Executive Officer (CEO), Lorato Morapedi has revealed that the country’s oldest development bank has engaged on soul searching in a bid to figure out a business model that will return the bank to profitability.
The bank is one of quasi-government institutions which had been earmarked for privatisation, but persistent financial problems over the years has stalled the progress. “When I came in, the mandate was very clear; to lead the bank through transformation that was needed to prepare the bank for privatisation,” Morapedi told WeekendPost in an exclusive interview. “We need to commercialise the bank, putting the bank in position that it would be able to apply for a banking license. I want it to be a fully-fledged bank before it can be privatised.”
The desire to transform the bank has not been easy on the ground, with Morapedi having to deal with legacy issues at the bank. Over the years, NDB had developed unpleasant reputation relating to its financial performance, a culture that Morapedi had to turnaround after taking over the reins in 2010. Mainstay in the NDB financial quagmires was the bank’s funding model, which caught the attention of Parliamentary Committee on Statutory Bodies and Public Enterprises in 2016.
“Development needs patient capital and NDB in the past was expected to raise money from money markets. It is not sustainable. We were forced to loan at high rate and they [SMEs] are not be able to meet their obligations,” observed Morapedi. “A more sustainable model is in two force; either NDB continues as FDI, then we need access to affordable or cheap funding for patient capital, or if we are to transform into the commercial space, we will need to have the other side, deposit taking because that is where cheaper funding will come from.”
NDB has been funding its loans from the money acquired from commercial banks, which both the shareholder, board of directors and executive management agree that it is bad business and is not sustainable for a development bank. The current funding arrangement was brought about by government’s decision to stop issuing bonds to NDB to raise the funds. NDB has been sourcing its funds from BIFM Capital, Barclays Bank and First National Bank Botswana (FNBB) at interest rate of 8.5 percent, and 9.5 percent for BIFM capital.
Morapedi concedes that the arrangement is not sustainable given the fact that they are also competing with commercial banks. In 2016, NDB’s loan book stood at P1.3 billion, and out of that P600 million had been placed under doubtful debt, of which P300 million was to be written off. Morapedi said Ministry of Finance, which NDB falls under appreciates what the bank is going through and the ministry has been backing the organisation to keep it afloat.
NDB was given P400 million by the ministry during 2016/17 financial year, while P200 million was disbursed during the current financial year. “When I came in together with the team that I found here, we all agreed that it is important to look at all key facets of the business; the people processes and the business,” she said.
“Priorities were systems and people. And immediately we embarked on system change. The system that we were using was not robust enough to afford us to give the excellent service that we wanted to give our clients, to be able to give us a good springboard in the journey that we wanted to embark on. We all agreed that we need robust integrated system.” While the new system was expected to be the beginning of good things, it however revealed more than they expected.
“After we implemented the new banking system, we realised that we had more non-performing loans than we thought, that over the years our predecessors were not aware of,” said Morapedi. The financial problems also meant that the bank had to do something to cut the cost. During Morapedi’s tenure as CEO, NDB underwent two retrenchment phases, first in 2012 and secondly in 2018, resulting 23 and 56 people going home.
In the latter retrenchment, the bank had to part ways with P48 million. The retrenchment has left the bank “leaner”, something which Moropedi believes it will bring efficiency. “On the people’s space, we embarked on restructuring exercise because we were quite alive to the fact that if we are going to be able to transform the bank, there are certain skills particular banking skills that we needed that we didn’t have,” she said. “The bank has to be in a good state; to be able to breakeven.
Privatising will only happen after the bank has applied for a licence.” Government has adopted a privatisation strategy similar to the one used by BTCL, in which government retains 51 percent in the entity and 49 percent is offered to the public, of which 5 percent will be offered to the NBD employees.
You may like
DPP drops Kably threat to kill case
The Botswana Democratic Party (BDP) Chief Whip and Member of Parliament for Letlhakeng/Lephephe Liakat Kably has welcomed the Directorate of Public Prosecution (DPP)’s decision not to prosecute BDP councillor, Meshack Tshenyego who allegedly threatened to kill him. However, the legislator has warned that should anything happen to his life, the state and the courts will have to account.
In an interview with this publication, Kablay said he has heard that the DPP has declined to prosecute Tshenyego in a case in which he threatened to kill him adding that the reasons he received are that there was not enough evidence to prosecute. “I am fine and at peace with the decision not to prosecute over evidential deficits but I must warn that should anything happen to my life both the DPP and the Magistrate will have to account,” Kablay said.
Connectedly, Kably said he has made peace with Tshenyego, “we have made peace and he even called me where upon we agreed to work for the party and bury the hatchet”.
The DPP reportedly entered into a Nolle Prosequi in the matter, meaning that no action would be taken against the former Letlhakeng Sub-district council chairperson and currently councillor for Matshwabisi.
According to the charge sheet before the Court, councilor Tshenyego on July 8th, 2022 allegedly threatened MP Kably by indirectly uttering the following words to nominatedcouncilor Anderson Molebogi Mathibe, “Mosadi wa ga Liakat le ban aba gagwe ba tsile go lela, Mosadi wame le banake le bone ba tsile go lela. E tla re re mo meeting, ka re tsena meeting mmogo, ke tla mo tlolela a bo ke mmolaya.”
Loosely translated this means, Liakat’s wife and children are going to shed tears and my wife and kids will shed tears too. I will jump on him and kill him during a meeting.
Mathibe is said to have recorded the meeting and forwarded it to Kably who reported the matter to the police.
In a notice to the Magistrate Court to have the case against Tshenyego, acting director of Public Prosecutions, Wesson Manchwe cited the nolle prosequi by the director of public prosecution in terms of section 51 A (30) of the Constitution and section 10 of the criminal procedure and evidence act (CAP 08:02) laws of Botswana as reasons for dropping the charges.
A nolle prosequi is a formal notice of abandonment by a plaintiff or prosecutor of all or part of a suit or action.
“In pursuance of my powers under section 51 A (300 of the Constitution and section 10 of the criminal procedure and evidence act (CAP 08:02) laws of Botswana, I do hereby stop and discontinue criminal proceedings against the accused Meshack Tshenyego in the Kweneng Administrative District, CR.No.1077/07/2022 being the case of the State vs Tshenyego,” said Manchwe. The acting director had drafted the notice dropping the charges on 13th day of March 2023.
The case then resumed before the Molepolole Magistrate Solomon Setshedi on the 14th of March 2023. The Magistrate issued an order directing “that matters be withdrawn with prejudice to the State, accused is acquitted and discharged.”
DPP seizes prosecution duties from Police
Directorate of Public Prosecution (DPP) has finally taken over prosecution from the Botswana Police Service (BPS). The police have been prosecuting for years, but the takeover means that they will now only focus on investigations and then hand over to the DPP for prosecution.
Talks of complete takeover began as far back as 2008, but for years it seemed implementation was sluggish. However, the Minister of Justice, Machana Shamukuni, revealed that the complete takeover is expected to be completed soon.
During a presentation to the Committee of Supply by Shamukuni this week, it was revealed that the project has been implemented in 22 police stations nationwide, including Maun, Selebi-Phikwe, Palapye, Francistown, and Kasane. He further stated that the project has been allocated P3,000,000 for the 2023/2024 financial year to facilitate the opening of more satellite offices for the DPP.
Shamukuni said the Lobatse station is scheduled for a complete takeover by the end of May 2023, while the Kasane DPP satellite office has been established and became operational as of February 1, 2023.
“As reported previously, preparations are at an advanced stage to open a satellite office in Tsabong to curtail expenses, as well as frequent long-distance trips to these areas, as it is currently serviced by the Lobatse DPP office,” Shamukuni said.
Shamukuni said that the takeover strategy is to enable a seamless and gradual takeover of prosecution from the BPS without overwhelming and overstretching the thin resources at its disposal.
According to Shamukuni, the implementation of the prosecution takeover project has increased the workload of the 211 prosecutors in the DPP establishment.
Furthermore, the Justice Minister said DPP statistics show that the DPP has a total of 11,903 cases and dockets as of January 2023. He indicated that this is a significant increase in the number of cases being handled by the DPP, considering that in November 2021, the DPP had just over 8,471 files.
“Out of the total case load, 8 382 are cases pending before various courts while 3521 are dockets received from law enforcement agencies of which 1 325 are awaiting service of summons while the rest are being assessed for suitability of prosecution or otherwise” said Shamukuni.
He further stated that The DPP has consistently maintained an 80% success rate in matters completed at court.
“As at the end of January 2023, the success rate stood at 82.3% against a target of 90% whilst the average performance in respect of turnaround time for conclusion of cases at court stood at 17.5 months against a target of 18 months,” he said.
BACKLOG OF CASES – LAND TRIBUNAL
Meanwhile, Minister Shamukuni has revealed that Gaborone land Tribunal is experiencing a backlog of cases. Before parliament this week, Shamukuni revealed that a total 230 appeals were completed for the period of April 2022- December 2022 and only 76.5% of them were completed within set time frame.
The minister said that the Gaborone division has experiencing a backlog of cases due to manpower constraints and he further indicated that presiding officers from other divisions have been brought in to expedite case disposal.
He further indicated that the land tribunal is a specialized court that has been empowered to resolve appeals arising from land boards. “It has been mandated to determine appeals from the decisions of Physical planning committees of Districts Councils” said Shamukuni.
Land Tribunal relocated to the Ministry of Justice from Ministry of Land and Water Affairs in November 2022.
“An amount of P37, 842,670 is requested to cover salaries, allowance and other operational expenses for the Department of the land Tribunal,” alluded Shamukuni
BCP, AP stalemate in 7 constituencies
When the Botswana Congress Party (BCP), Alliance for Progressives, Botswana Labour Party (BLP), and conveners reconvene next week, the controversial issue of allocation of the seven constituencies will be the main topic of discussion, WeekendPost can reveal.
Not only that, but the additional four constituencies will also dominate the talks. The idea is to finally close the “constituency allocation phase,” which has proven to be the most difficult part of the ongoing negotiations.
Earlier this year, the two parties announced that the marathon talks would be concluded by February. Even at a media briefing last month, BCP Secretary General Goretetse Kekgonegile and Publicity Secretary Dr. Mpho Pheko were optimistic that the negotiations would be concluded before the end of February.
However, it is now mid-March and the talks have yet to be concluded. What could be the reasons for the delay? This is a question that both Kekgonegile and Pheko have not responded to, as they have ignored the reporters’ inquiries. However, a senior figure within the party has confided to this publication as to what is delaying the highly anticipated negotiations.
“We are reconvening next week to finalize constituency allocations, taking into account the additional four new ones plus the outstanding seven,” he explained. It later surfaced that Gaborone Central, Gaborone North, Mogoditshane, Tswapong North, Francistown West, Tati West, and Nata Gweta are all contested by both BCP and AP. This is because the other 50 constituencies were allocated by December of last year.
The three parties have failed to find common ground for the Bosele Ward by-elections. Are these constituencies not a deal breaker for the talks? “None of the constituencies is a deal breaker,” responded a very calm BCP official.
In Bosele Ward, AP has yielded to BCP, despite most of its members disapproving the decision. On the other hand, BLP has refused, and it will face off with BCP together with Botswana Democratic Party (BDP) and Umbrella for Democratic Change (UDC).
The decision by BLP to face off with BCP has been labelled as a false start for the talks by political observers.