NDB sinks as financial crisis hits hard
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The beleaguered National Development Bank (NDB) has started the process of retrenching staff owing to financial crisis that has hit the bank, Weekend Post has established.
Information gathered by this publication indicates that P31 million has been budgeted for the retrenchment exercise, which will start next week following a meeting with the staff union. Weekend Post has been informed by insiders that between the 21st-25 of March management will issue employees with letters indicating the bank’s decision to layoff some staff. “The union had a meeting with with its members informing them about the development, the mood was sombre today [Wednesday],” said the impeccable source.
“The meeting for for the unionised employees was on Tuesday, for the non-unionised was today [Wednesday] — the letters are coming this month end.” The source further indicated that management will then proceed to inform the Commissioner of Labour as well as the minister [Finance and Economic Development] with regard to the imminent retrenchments.
In 2016, NDB requested government to inject capital amounting to about P1 billion in the next three years in order to transform the bank and prepare it for commercialisation. Last year, it was offered P400 million by government, P10o million of it being a grant while the remaining P300 million was a loan.
Chief Executive Officer of the Bank, Lorato Morapedi informed the parliamentary committee on Statutory Bodies and Enterprises in 2016 that she wants government to inject P400 million in the next financial year, followed by two governments guaranteed loans of P165 million and P250 million in subsequent years.
Morapedi said, in total, for the NDB to stabilise and be in a competitive state, it would need P1 billion. The committee learnt that NDB problems have been caused by various factors, among them its source of funding and inability to recover its loans. However, NDB has fallen short of the other P600 million initially required by the bank. Sources have informed this publication that NDB has made plans to request another P1.3 billion from government, but the new president is reluctant, and wants a new board at the NDB and CEO first before making considerations. Failure to secure more funding from government means that the bank only has P10 million to disburse as loans this financial year (2018/19).
CRITICISM OF NDB FUNDING MODEL
NDB has been warned that funding its loans from the money acquired from commercial banks 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, according to Morapedi. WeekendPost understands that NDB is 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.
When presenting before the parliamentary committee Morapedi conceded that the arrangement is not sustainable given the fact that they are also competing with commercial banks. She informed the committee that NDB has approached government for subsidized funding.
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 will be written off.
Samson Guma Moyo, the chairperson of the committee said the amount which the bank marked as provision for doubtful debt is too high, and the bank should work on reducing that. Morapedi said part of the problem was inherited, and the bank is putting forth monitoring tools to ensure that it improves the loan recovery. She further said the bank currently is doing minimal loaning, as its turn-around strategy focus on non-performing loans.
NDB has also borrowed their staff a total amount of P130 million at interest rate of 5 percent for mortgages and 8.5 percent for personal loans. This has however been questioned by committee member, Pius Mokgware who said though he believes in staff welfare, the bank was borrowing its staff at an interest lower than the interest they are charged by the commercial banks. Morapedi informed the committee that, after turning around the bank, they want to bring on board an equity partner or technical partner as part of its commercialisation strategy.
Government has adopted a commercialisation 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. She said even after privatisation, NDB will continue to focus on agriculture and SMME funding, and further noted that it will complement other government development institutions such as Botswana Development Corporation (BDC) which is moving away from SMME funding. Forty-six percent of NDB portfolio is Agriculture.
NDB reports to both Ministry of Finance and Development Planning and Bank of Botswana (BoB). NDB has been able to meet six months regular deadline for the ministry, while failing the three months deadline requirement by BoB of submitting audited financial statements.
Another committee member, Ndaba Gaolathe had said going forward the bank should review source of funding because the current arrangement is not ideal. He said, the bank should also deal with legacy issues and clean out a lot of things.
EMPLOYEES WANT THE BOARD AND CEO FIRED
Several NDB employees who talked to this publication have stated that one way to save the financially riddled bank is to boot out the Board of Directors, Chief Executive Officer as well as senior management. One of the complaints that employees have against management is that, there are responsible for the mess at the bank, therefore, part of correcting the problem is bring new management. NDB boss is accused of refusing to listen to suggestions from employees on how best to turn around the fortunes of the bank.
“NDB is at Cul-de-sac as we speak with only P10 million to disburse for 2018/19 financial year. Only government funding will rescue the situation, but if government is to finance NDB this year, they must first get rid of those who made the loss. It will be futile to finance NDB again under the same people,” said one employee. This publication is reliably informed that the bank’s Head of Strategy has tendered her resignation, and will leave the organisation at the end of the month.
Another bank manager, responsible for Maun branch has her contract coming to an end at the end of May 2018, and employees want her also to leave the bank. Public Enterprises and Statutory Bodies committee member Ndaba Gaolathe had previously accused the NDB of lacking ambition and not having a clear vision.
He said as a development bank, they should have a clear vision of what they want to achieve and the impact they want to make in the next years. “NDB should be creative with the products it is offering and diversify the products as well,” he said. In the three years NDB has made losses; P87.8 million (2015) to P48.4 million (2016) and P168.2 million (2017).
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ENVIRONMENT ISSUES: Masisi asks Virginia for help
President Mokgweetsi Masisi says the issue of sustainable natural resources management has always been an important part of Botswana’s national development agenda.
Masisi was speaking this week on the occasion of a public lecture at Virginia Polytechnic, under theme, “Merging Conservation, Democracy and Sustainable Development in Botswana.”
Botswana, according to Masisi, holds the view that the environment is fragile and as such, must be managed and given the utmost protection to enable the achievement of Sustainable Development Goals (SDGs).
“It is necessary that we engage one another in the interchange of ideas, perspectives, visualizations of social futures, and considerations of possible strategies and courses of action for sustainable development,” said Masisi.
On the other hand, dialogue, in the form of rigorous democratic discourse among stakeholders presents another basis for reconfiguring how people act on their environments, with a view to conserving its resources that “we require to meet our socio-economic development needs on a sustainable basis,” Masisi told attendees at the public lecture.
He said government has a keen interest in understanding the epidemiology and ecology of diseases of both domestic and wild animals. “It is our national interest to forestall the dire consequences of animal diseases on our communities livelihoods.”
President Masisi hoped that both Botswana and Virginia could help each other in curbing contagious diseases of wildlife.
“We believe that Virginia Tech can reasonably share their experiences, research insights and advances in veterinary sciences and medicines, to help us build capacity for knowledge creation and improve efforts of managing and containing contagious diseases of wildlife. The ground is fertile for entering into such a mutually beneficial partnership.”
When explaining environmental issues further, Masisi said efforts of conservation and sustainable development might at times be hampered by the emergence and recurrence of diseases when pathogens mutate and take host of more than one species.
“Water pollution also kills aquatic life, such as fish, which is one of humanity’s much deserved sources of food. In this regard, One Health Approach imposes ecological responsibility upon all of us to care for the environment and the bio-diversity therein.”
He said the production and use of animal vaccines is an important space and tool for conservation, particularly to deal with trans-border animal diseases.
“In Botswana, our 43-year-old national premier pharmaceutical institution called Botswana Vaccine Institute has played its role well. Through its successful production of highly efficacious Foot and Mouth vaccines, the country is able to contain this disease as well as supply vaccines to other countries in the sub-region.:
He has however declared that there is need for more help, saying “We need more capacitation to deal with and contain other types of microbial that affect both animals and human health.”
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Masisi saddened by deaths of elephant attacks
President Mokgweetsi Masisi has expressed a strong worry over elephants killing people in Botswana. When speaking in Virginia this week, Masisi said it is unfortunate that Batswana have paid a price with their own blood through being attacked by elephants.
“Communities also suffer unimaginable economic losses yearly when their crops are eaten by the elephants. In spite of such incidents of human-elephant conflict, our people embrace living together with the animals. They fully understand wildlife conservation and its economic benefits in tourism.”
In 2018, Nthobogang Samokwase’s father was attacked by an elephant when travelling from the fields, where he stayed during the cropping season.
It was reported that the man couldn’t run because of his age. He was found trampled by the elephant and was pronounced dead upon arrival at the hospital.
In the same year, in Maun, a 57-year-old British woman was attacked by an elephant at Boro and died upon arrival at the hospital. The woman was with her Motswana partner, and were walking dogs in the evening.
Last month, a Durban woman named Carly Marshall survived an elephant attack while on holiday in the bush in Botswana. She was stabbed by one of the elephant’s tucks through the chest and was left with bruises. Marshall also suffered several fractured ribs from the ordeal.
President Masisi Botswana has the largest population of African elephants in the world, totaling more than 130 000. “This has been possible due to progressive conservation policies, partnerships with the communities, and investment in wildlife management programmes.”
In order to benefit further from wildlife, Masisi indicated that government has re-introduced controlled hunting in 2019 after a four-year pause. “The re-introduction of hunting was done in an open, transparent and democratic way, giving the communities an opportunity to air their views. The funds from the sale of hunting quota goes towards community development and elephant conservation.”
He stressed that for conservation to succeed, the local people must be involved and derive benefits from the natural resources within their localities.
“There must be open and transparent consultations which involve all sectors of the society. It is against this backdrop that as a country, we lead the continent on merging conservation, democracy and sustainable development.”
Masisi stated that Botswana is open to collaborative opportunities, “particularly with identifiable partners such as Virginia Tech, in other essential areas such as conservation, and the study of the interplay among the ecology of diseases of wild animals and plants, and their effects on human health and socio-economic development.”
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Gov’t commit to injecting more funds in fighting HIV
Minister for State President Kabo Morwaeng says government will continue to make resources available in terms of financial allocations and human capital to ensure that Botswana achieves the ideal of eradicating HIV and AIDS as a public health threat by 2030.
Morwaeng was speaking this morning in Gaborone at the High-Level Advocacy event to accelerate HIV Prevention in Botswana. He said the National AIDS and Health Promotion Agency (NAPHA), in partnership with UNAIDS, UN agencies, the Global Fund and PEPFAR, have started a process of developing transition readiness plan for sustainability of HIV prevention and treatment programmes.
“It is important for us, as a country that has had a fair share of donor support in the response to an epidemic such as HIV and AIDS, to look beyond the period when the level of assistance would have reduced, or ceased, thus calling for domestic financing for all areas which were on donor support.”
Morwaeng said this is important as the such a plan will guarantee that all the gains accrued from the response with donor support will be sustained until the end when “we reach the elimination of HIV and AIDS as a public health threat by 20230,” he said.
“I commit to continue support efforts towards strengthened HIV prevention, accentuating HIV primary prevention and treatment as prevention towards Zero New Infections, Zero Stigma, Discrimination and Zero AIDS related death, to end AIDS in Botswana.”
He reiterated that government commits to tackle legislative, policy and programming challenges that act as barriers to the achievement of the goal of ending AIDS as a public health threat.
In the financial year 2022/2023, a total of 119 Civil Society Organizations, including Faith Based Organizations, were contracted with an amount of P100 million to implement HIV and NCDs prevention activities throughout the country, and the money was drawn from the Consolidated Fund.
Through an upcoming HIV Prevention Symposium, technical stakeholders will use outcomes to develop the Botswana HIV Prevention Acceleration Road Map for 2023-2025.
Morwaeng stated that government will support and ensure that Botswana plays its part achieving the road map. He said there is need to put hands on the deck to ensure that Botswana sustains progress made so far in the fight against HIV and AIDS.
“There are tremendous achievements thus far to, reach and surpass the UNAIDS fast track targets of 95%- 95%- 95% by the year 2025. As reflected by the BAIS preliminary results of 2021, we now stand at 95- 98- 98 against the set targets.”
“These achievements challenge us to now shift our gears and strive to know who are the remaining 5% for those aware of their HIV status, 2% of enrolment on treatment by those aware of their status and 2% of viral suppression by those on treatment.”
Explaining this further, Morwaeng said shift in gears should extend to coming up with robust strategies of determining where these remaining people are as well as how they will be reached with the necessary services.
“These are just some of the many variables that are required to ensure that as a country, we are well positioned to reaching the last mile of our country’s response to the HIV and AIDS pandemic.”