NFSC draft ready for Cabinet

THE long-awaited draft Namibian Financial Services Charter (NFSC) is ready for submission to Cabinet “in due course”, the Permanent Secretary in the Ministry said on Friday.

Speaking at the launch of the Namibia Financial Sector Review 2008 publication, Calle Schlettwein said the charter will “bring about a democratisation” of the financial services industry. The financial services charter is aimed at achieving better representation of previously disadvantaged Namibians in the second best performing industry after mining.At a media presentation of the draft NFSC policy in November 2006, it was said that the charter would be completed and presented to the Minister of Finance for implementation by January 2008.In the foreword to the Namibia Financial Services Review 2008 launched on Friday, Deputy Minister of Finance Tjekero Tweya said the draft submitted to the ministry was “very encouraging” and addressed “many of the concerns of the Government, including the access of ordinary members of the public to the financial sector; the affordability of financial services; the ownership of companies; as well as the training of Namibians”.Tweya said there was no point in transforming the financial sector if Namibians were “not empowered and involved in its management”.The draft NFSC policy presented to the media way back in 2006 deals with the transformation of company ownership to previously disadvantaged Namibians, a higher representation of black people at management level and procurement of goods from enterprises that a have black majority ownership.Each financial institution is expected to target black ownership of 26 per cent of their entities by 2016.By 2011, each institution should have a 40 per cent representation of black Namibians on boards of directors, and at least 11 per cent of them should be women.Other Black Economic Empowerment (BEE) targets set by the charter are 10 per cent of all business loans issued by banks should go to previously disadvantaged Namibians so that they can buy into companies to acquire a degree of ownership.Companies in the finance sector would be expected to commit at least five per cent of their investment portfolios to BEE companies from 2008 onwards.The Charter also provides for a procurement policy, whereby companies in the finance industry will buy goods and services from approved BEE enterprises or those companies that show proof of BEE shareholders or business partners.Managers of some banks in Namibia claim they have already started implementing some of the provisions of the draft charter even before it became policy.Leonard Haynes, CEO of FNB says: “We at FNB are already implementing most of the principles contained in the charter”.According to Nedbank, Namibianisation was achieved at the bank through its broad-based economic empowerment transaction of 2006 when NedNamibia Holdings and sister companies Old Mutual and Mutual & Federal concluded the largest broad-based black empowerment deal.”We are broad-based and our shareholders comprise a range of constituents, including churches, women’s groups and trade unions,” says Erastus Hoveka, the Managing Director of Nedbank.For Standard Bank its plans to list on the Namibia Stock Exchange would Namibianise its operations, raise more capital and encourage others to invest.”At the same time we hope to be involved in a black economic empowerment transaction as well,” says the bank’s Managing Director, Mpumzi Pupuma.Bank Windhoek says it is fully Namibian-controlled.But, while welcoming the industry’s participation in the financial services charter, Government says BEE efforts in the sector are moving at a snail’s pace.The financial services charter is aimed at achieving better representation of previously disadvantaged Namibians in the second best performing industry after mining.At a media presentation of the draft NFSC policy in November 2006, it was said that the charter would be completed and presented to the Minister of Finance for implementation by January 2008.In the foreword to the Namibia Financial Services Review 2008 launched on Friday, Deputy Minister of Finance Tjekero Tweya said the draft submitted to the ministry was “very encouraging” and addressed “many of the concerns of the Government, including the access of ordinary members of the public to the financial sector; the affordability of financial services; the ownership of companies; as well as the training of Namibians”.Tweya said there was no point in transforming the financial sector if Namibians were “not empowered and involved in its management”.The draft NFSC policy presented to the media way back in 2006 deals with the transformation of company ownership to previously disadvantaged Namibians, a higher representation of black people at management level and procurement of goods from enterprises that a have black majority ownership.Each financial institution is expected to target black ownership of 26 per cent of their entities by 2016.By 2011, each institution should have a 40 per cent representation of black Namibians on boards of directors, and at least 11 per cent of them should be women.Other Black Economic Empowerment (BEE) targets set by the charter are 10 per cent of all business loans issued by banks should go to previously disadvantaged Namibians so that they can buy into companies to acquire a degree of ownership.Companies in the finance sector would be expected to commit at least five per cent of their investment portfolios to BEE companies from 2008 onwards.The Charter also provides for a procurement policy, whereby companies in the finance industry will buy goods and services from approved BEE enterprises or those companies that show proof of BEE shareholders or business partners.Managers of some banks in Namibia claim they have already started implementing some of the provisions of the draft charter even before it became policy.Leonard Haynes, CEO of FNB says: “We at FNB are already implementing most of the principles contained in the charter”.According to Nedbank, Namibianisation was achieved at the bank through its broad-based economic empowerment transaction of 2006 when NedNamibia Holdings and sister companies Old Mutual and Mutual & Federal concluded the largest broad-based black empowerment deal.”We are broad-based and our shareholders comprise a range of constituents, including churches, women’s groups and trade unions,” says Erastus Hoveka, the Managing Director of Nedbank.For Standard Bank its plans to list on the Namibia Stock Exchange would Namibianise its operations, raise more capital and encourage others to invest.”At the same time we hope to be involved in a black economic empowerment transaction as well,” says the bank’s Managing Director, Mpumzi Pupuma.Bank Windhoek says it is fully Namibian-controlled.But, while welcoming the industry’s participation in the financial services charter, Government says BEE efforts in the sector are moving at a snail’s pace.