U rbane, sophisticated, strategic and humble are words that slip off the tongue after meeting David Nuyoma, whose ascendancy to the top job at the Development Bank of Namibia (DBN) was not without a struggle.
Born in Katutura 45 years ago, Nuyoma entered the retail sector at a tender age. His career took off after graduating in development studies at East Anglia university in the UK.On his return to Namibia, he worked for the Council of Churches and was subsequently snapped up by the new government after independence.As chief economist in the ministry of trade, Nuyoma was instrumental in steering the first democratic government’s fiscal and monetary path.In 2004 he started the DBN with government seed money and has grown it to what it is today.Nuyoma is married and lives in Windhoek.The Namibian’s Na-iem Dollie had an in-depth and exclusive interview with Nuyoma.The Namibian (TN): Let’s start controversially.Agribank has just announced that it will slash short-term interest on loans by seven percentage points to 4%.Will this make you uncompetitive? David Nuyoma (DN): No.We are dealing with two different markets.The challenges that agriculture faces are different to those faced by the Development Bank of Namibia.Emerging entrepreneurs face pressures about input and service costs and we provide the training and capital to these people.TN: The government is the sole shareholder in the bank.In your annual report, you said that the bank was looking at other shareholders.How far are you in securing these? DN: The DBN is the only state-owned enterprise where the Act is very specific.The government can allow other shareholders to come in, but these shareholders will have to agree with the mandate of the Bank.The profile of the group that becomes a shareholder must be in sync with DBN’s goals.The Minister of Finance [Saara Kuugongelwa-Amadhila] has repeatedly appealed to the market for potential shareholders to come forward.But while we search for new entities, we need to keep our house in order.Yes, we are looking both locally and internationally, and we hope to have a capitalisation of N$1 billion before other shareholders come in.We are indeed open to pension funds hoping to invest their surpluses.Our present mission is to keep our business viable with good governance.We brought King to Namibia in 2006 to assist us in setting up systems of corporate governance.TN: The Reserve Bank of Namibia has recently decided to keep the repo rate steady while South Africa’s central bank has upped its rate.What’s your take on Tom Alweendo’s decision not to follow the SA example? DN: The recent explanations given by monetary policy committee of the Bank of Namibia (BoN) are instructive.I’m encouraged that Namibia has taken a sovereign position despite the fact that our currency is pegged to the rand.I think the BoN has done its sensitivity analysis and its arguments are solid.It’s a realistic position in Namibia not to increase interest rates at this stage.TN: What about your mentorship programmes? DN: As part of our deals with intermediary banks, we insist on mentorships.We have workshop-style programmes and role-playing games including cash-flow games and marketing exercises.The clients are taught the real costs of goods and services.Often we find that entrepreneurs determine the selling price of their goods by looking at their competitors’ prices.We dig deeper and explain that their selling price should be a function of transport costs, production costs and so on.The input costs of the product must be factored into the selling price.TN: Do you have a formal relationship with SA-based Development Bank of Southern Africa (DBSA)? DN: Yes, there is a formal relationship with DBSA.We have benefited enormously from this since 2004.We have an exchange programme with the DBSA.our technical experts are sent to South Africa and the DBSA does likewise, sending its experts to us.The sharing of experiences is very important.We also have a relationship with the Industrial Development Corporation in Soputh Africa, although not formal.The DBN is a member of the SADC Development Finance Institutional Network, which I chair.My two-year term of office ends in November this year.This 23-member network has set up a Journey to Excellence programme that is designed to increase productivity in the region.TN: Prime Minister Nahas Angula recently made the comment that we continue to export the surpluses of locally made capital.He went on to say that we need to re-invest locally in order to build our nation.What’s your take on his comments? DN: I think that there is frustration about funds flowing across our borders.That is understood.Clearly we have investment opportunities here and we have an infrastructure to build.We have to ask ourselves the question: If foreigners are able to identify these investment opportunities, why not us? The DBN finances projects locally and we are creating synergies with other stakeholders who have the capacity to assist us in our choices.While I agree that funds need to be invested locally, we need to ensure that we have the capacity to manage these funds.We need to build the skills to execute and manage the money and if we don’t have the skills, we need to procure them.There is no replacement for knowledge.TN: Namibia, like our neighbour down south, is rapidly turning into a debt-driven society.How do we stem the tide? DN: This is very difficult to answer.If we live beyond our means, then it’s a recipe for disaster.We need to be humble enough to accept what we have and not compare what we possess with what our neighbour has.Debt is as bad as any other addiction and Namibians should be having a national convention to address this issue.As a banker, I am duty bound to be responsible and exercise caution.While people have a constitutional right to choose their lifestyles, unscrupulous lenders are driven by greed and that’s something that we have to put a stop to.On the other hand, if debt is used for productive purposes, then it’s put to good use.A Brief Resumé Chief Executive Officer Development Bank of Namibia MA: Industrial Development, University of East Anglia, Norwich, UK Member of the Institute of Directors in Southern Africa Commissioner of the National Planning Secretariat Member of the President’s Economic Advisory Council Former Chairman: National Petroleum Corporation of Namibia Chairman: SADC Development Finance Institutions’ Network Former Deputy Chairman: Namibia Stock Exchange David Nuyoma on Development There is a misconception that development and enterprise are at opposite ends of the spectrum.I don’t buy that.Development is good business.And good business is good for development.This philosophy makes being the CEO of the Development Bank a privilege.When companies grow, they employ more people and spend more.There is an obvious and direct correlation between people’s welfare and overall positive economic environment.There is obviously greater prosperity when people have jobs and salaries and are able to provide for their families.But with that prosperity there is also an increase in the flow of money; there is now more money available for taxes and government is able to access these resources to advance growth.Development is a process; it is involved and it is complex, because it deals with the improvement of people’s social and material conditions.Development, in essence, is a step forward – for the better.His career took off after graduating in development studies at East Anglia university in the UK.On his return to Namibia, he worked for the Council of Churches and was subsequently snapped up by the new government after independence.As chief economist in the ministry of trade, Nuyoma was instrumental in steering the first democratic government’s fiscal and monetary path.In 2004 he started the DBN with government seed money and has grown it to what it is today.Nuyoma is married and lives in Windhoek.The Namibian’s Na-iem Dollie had an in-depth and exclusive interview with Nuyoma.The Namibian (TN): Let’s start controversially.Agribank has just announced that it will slash short-t
erm interest on loans by seven percentage points to 4%.Will this make you uncompetitive? David Nuyoma (DN): No.We are dealing with two different markets.The challenges that agriculture faces are different to those faced by the Development Bank of Namibia.Emerging entrepreneurs face pressures about input and service costs and we provide the training and capital to these people.TN: The government is the sole shareholder in the bank.In your annual report, you said that the bank was looking at other shareholders.How far are you in securing these? DN: The DBN is the only state-owned enterprise where the Act is very specific.The government can allow other shareholders to come in, but these shareholders will have to agree with the mandate of the Bank.The profile of the group that becomes a shareholder must be in sync with DBN’s goals.The Minister of Finance [Saara Kuugongelwa-Amadhila] has repeatedly appealed to the market for potential shareholders to come forward.But while we search for new entities, we need to keep our house in order.Yes, we are looking both locally and internationally, and we hope to have a capitalisation of N$1 billion before other shareholders come in.We are indeed open to pension funds hoping to invest their surpluses.Our present mission is to keep our business viable with good governance.We brought King to Namibia in 2006 to assist us in setting up systems of corporate governance.TN: The Reserve Bank of Namibia has recently decided to keep the repo rate steady while South Africa’s central bank has upped its rate.What’s your take on Tom Alweendo’s decision not to follow the SA example? DN: The recent explanations given by monetary policy committee of the Bank of Namibia (BoN) are instructive.I’m encouraged that Namibia has taken a sovereign position despite the fact that our currency is pegged to the rand.I think the BoN has done its sensitivity analysis and its arguments are solid.It’s a realistic position in Namibia not to increase interest rates at this stage.TN: What about your mentorship programmes? DN: As part of our deals with intermediary banks, we insist on mentorships.We have workshop-style programmes and role-playing games including cash-flow games and marketing exercises.The clients are taught the real costs of goods and services.Often we find that entrepreneurs determine the selling price of their goods by looking at their competitors’ prices.We dig deeper and explain that their selling price should be a function of transport costs, production costs and so on.The input costs of the product must be factored into the selling price.TN: Do you have a formal relationship with SA-based Development Bank of Southern Africa (DBSA)? DN: Yes, there is a formal relationship with DBSA.We have benefited enormously from this since 2004.We have an exchange programme with the DBSA.our technical experts are sent to South Africa and the DBSA does likewise, sending its experts to us.The sharing of experiences is very important.We also have a relationship with the Industrial Development Corporation in Soputh Africa, although not formal.The DBN is a member of the SADC Development Finance Institutional Network, which I chair.My two-year term of office ends in November this year.This 23-member network has set up a Journey to Excellence programme that is designed to increase productivity in the region.TN: Prime Minister Nahas Angula recently made the comment that we continue to export the surpluses of locally made capital.He went on to say that we need to re-invest locally in order to build our nation.What’s your take on his comments? DN: I think that there is frustration about funds flowing across our borders.That is understood.Clearly we have investment opportunities here and we have an infrastructure to build.We have to ask ourselves the question: If foreigners are able to identify these investment opportunities, why not us? The DBN finances projects locally and we are creating synergies with other stakeholders who have the capacity to assist us in our choices.While I agree that funds need to be invested locally, we need to ensure that we have the capacity to manage these funds.We need to build the skills to execute and manage the money and if we don’t have the skills, we need to procure them.There is no replacement for knowledge.TN: Namibia, like our neighbour down south, is rapidly turning into a debt-driven society.How do we stem the tide? DN: This is very difficult to answer.If we live beyond our means, then it’s a recipe for disaster.We need to be humble enough to accept what we have and not compare what we possess with what our neighbour has.Debt is as bad as any other addiction and Namibians should be having a national convention to address this issue.As a banker, I am duty bound to be responsible and exercise caution.While people have a constitutional right to choose their lifestyles, unscrupulous lenders are driven by greed and that’s something that we have to put a stop to.On the other hand, if debt is used for productive purposes, then it’s put to good use. A Brief Resumé Chief Executive Officer Development Bank of Namibia MA: Industrial Development, University of East Anglia, Norwich, UK Member of the Institute of Directors in Southern Africa Commissioner of the National Planning Secretariat Member of the President’s Economic Advisory Council Former Chairman: National Petroleum Corporation of Namibia Chairman: SADC Development Finance Institutions’ Network Former Deputy Chairman: Namibia Stock Exchange David Nuyoma on Development There is a misconception that development and enterprise are at opposite ends of the spectrum.I don’t buy that.Development is good business.And good business is good for development.This philosophy makes being the CEO of the Development Bank a privilege.When companies grow, they employ more people and spend more.There is an obvious and direct correlation between people’s welfare and overall positive economic environment.There is obviously greater prosperity when people have jobs and salaries and are able to provide for their families.But with that prosperity there is also an increase in the flow of money; there is now more money available for taxes and government is able to access these resources to advance growth.Development is a process; it is involved and it is complex, because it deals with the improvement of people’s social and material conditions.Development, in essence, is a step forward – for the better.
