27 Oct 2013

The National Development Bank (NDB) transition bill is expected to be passed during the first meeting of the fifth session of the 10th Parliament, which is scheduled to commence on November 4.

This was said by the Public Enterprises Evaluation and Privatisation Agency (PEEPA) acting chief executive officer, Ms Tiny Diswai-Moremi when updating federations of trade unions on what PEEPA was doing in terms of privatising NDB.

Ms Diswai-Moremi said a privatised NDB would be more competitive and able to compete with other commercial banks in the country. She also added that a privatised NDB would allow for citizen economic empowerment through ownership of shares. “As you and I buy the NDB shares, it will allow for the broadening of the capital market base of the country,” said Ms Diswai-Moremi.

She also noted that the transition bill would allow for the transformation of NDB from a company incorporated by an act of Parliament into a company registered with the Registrar of Companies. She said they hope the bill would be considered a priority to allow them to move forward.

“The bill will allow us to incorporate NDB as a company, and it will also facilitate us to commence procurement of an Initial Public Offering (IPO) advisor,” said Ms Diswai-Moremi.

She said a public offering advisor “will do a due diligence on NDB and be able to tell us how much each NDB share is going to cost,” adding that a prospectus would then be prepared. The acting chief executive officer explained that a prospectus “is a document used to market and buy shares and to implement the IPO.”  

Ms Diswai-Moremi said the strategic objective for privatising NDB was fourfold. She said the first was that the government wanted to withdraw from commercial activities where there were adequate private sector players. She noted that there were a lot of commercial banks in the country and that more kept on coming.

“There are so many banks and so many banking institutions, therefore there is really no reason why the government should hold on to the NDB. The initial reason for government to set it up was to develop the capital market and now it is widely developed.

Therefore there is really no pressing economic reason why the government should hold to it,” she added. The privatisation strategy for NDB was approved in March 2011. Up to 49 per cent of the shares of the bank are to be sold to citizens and non-citizens through an IPO.

The government will retain 51 per cent, five per cent will be set aside for NDB employees and 30 per cent has to be sold to citizens and citizen owned companies only. The remaining 14 per cent will then be sold to non-citizens. ENDS