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IFC INVESTS IN NAMIBIA’S FINANCIAL SECTOR


L. Joseph
Phone:  (202) 473-7700

Fax:      (202) 974-4384

E-mail:  
ljoseph@ifc.org


WINDHOEK, NAMIBIA, March 22, 2001—The International Finance Corporation will invest N$5.8 million (about US$750,000) in NIB Namibia (Pty) Limited with the aim of establishing Namibia’s first full-service merchant bank.  NIB Namibia will offer an array of services to its clients, including corporate finance, project finance, private equity, investment management, and treasury services.  IFC will take a 15 percent equity stake in NIB Namibia and provide secondary capital in the form of cumulative redeemable debentures.

NIB Namibia is a joint venture among Nedcor Investment Bank Holdings (65 percent), Pamue Investments Corporation (10 percent), Kumwe Investment Holdings (10 percent), and IFC (15 percent).  NIB Holdings, a leading South African merchant bank, is the project’s main sponsor and strategic partner.  Pamue and Kumwe, two Namibian business groups, will be the local partners.


Over the next five years, NIB Namibia intends to transform itself into a full-service provider of merchant banking services to the Namibian marketplace and develop the necessary local delivery capacity to operate on a largely self-sufficient basis.  NIB Holdings will support this process through skills transfer, training, and access to intellectual capital and know-how.  Once successfully established, NIB Holdings expects to replicate this model in other southern African countries and build a network of delivery hubs in the region.


While Namibia’s financial sector is well represented by commercial banks, insurance companies, and asset managers, almost no domestic capacity exists in the areas of project, corporate, and structured finance to address the emerging opportunities in infrastructure, commercialization, and privatization of state assets or the structuring of larger investment projects.  In addition, there is a need for professional services in development finance and general investment consultancy.  Such expertise is currently sourced from outside Namibia, primarily from South Africa's large investment and merchant banks.  NIB Namibia will play a crucial role in filling this void in the market.


The project is IFC's second financial services investment in Namibia.  In 1998, IFC took a 25 percent equity stake in Namlife, Namibia's first indigenous life insurance company.


IFC’s Executive Vice President, Peter Woicke, who signed the agreements on a visit to Windhoek, said the project was an important step in the development of increased indigenous participation in Namibia’s financial sector.  He added that it would create local delivery capacity in an area that was previously the domain of the large South African commercial banks.


Chief Executive Officer of NIB Holdings, Dr. Izak Botha, said the project would provide for a higher quality of service to Namibian clients.


Managing Director of NIB Namibia, Steve Galloway, added that increasing local capacity in Namibia would speed the development of the country’s fast-growing financial services sector and help the private and public sectors work together more harmoniously.


The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries as a way to reduce poverty and improve people’s lives.  IFC finances private sector investments in emerging markets, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.