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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.

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BDP decides Balopi’s fate

22nd November 2021
Balopi

The Botswana Democratic Party (BDP) Central Committee (CC) meeting, chaired by President Dr Mokgweetsi Masisi late last month, resolved that the party’s next Secretary-General (SG) should be a full-time employee based at Tsholetsa House and not active in politics.

The resolution by the CC, which Masisi proposed, is viewed as a ploy to deflate the incumbent, Mpho Balopi’s political ambitions and send him into political obscurity. The two have not been on good terms since the 2019 elections, and the fallout has been widening despite attempts to reconcile them. In essence, the BDP says that Balopi, who is currently a Member of Parliament, Minister of Employment, Labour Productivity and Skills Development, and a businessman, is overwhelmed by the role.

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BDF-Namibians shootings autopsy report revealed

22nd November 2021
BDF

The Botswana Defence Force (BDF)-Namibians fatal shooting tragedy Inquest has revealed through autopsy report that the BDF carried over 800 bullets for the mission, 32 of which were discharged towards the targets, and 19 of which hit the targets.

This would mean that 13 bullets missed the targets-in what would be a 60 percent precision rate for the BDF operation target shooting. The Autopsy report shows that Martin Nchindo was shot with five (4) bullets, Ernst Nchindo five (5) bullets, Tommy Nchindo five (5) bullets and Sinvula Munyeme five (5) bullets. From the seven (7) BDF soldiers that left the BDF camp in two boats, four (4) fired the shots that killed the Namibians.

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Gov’t confused over Moitoi’s UN job application

22nd November 2021
VENSON MOITOI

The former Minister of Foreign Affairs and International Cooperation, Pelonomi Venson-Moitoi’s decision to apply for the positions of United Nations Special Representative of the Secretary-General (SRSG) and their deputies (DSRSG), has left the government confused over whether to lend her support or not, WeekendPost has established.

Moitoi’s application follows the Secretary-General’s launch of the third edition of the Global Call for Heads and Deputy Heads of United Nations Field Missions, which aims to expand the pool of candidates for the positions of SRSG) and their deputies to advance gender parity and geographical diversity at the most senior leadership level in the field. These mission leadership positions are graded at the Under-Secretary-General and Assistant Secretary-General levels.

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