DAR ES SALAAM : THE government plans to adopt the NMB Bank ownership model in reforms of state-owned enterprises (SOEs) as part of the strategy to improve their performances, Treasury Registrar, Nehemiah Mchechu said on Monday.
Mr Mchechu made the revelation in Dar es Salaam at the launch of NMB Jamii Bond offer where he said the arrangement was ideal to help bring the private sector efficiency needed in running public corporations.
He admitted that the management and performance of the bank impresses the government hence the decision to replicate its ownership model in the SOEs.
“We in fact don’t regret to invest in NMB because of the successes it continues to post, which should be emulated by state enterprises as we embark on the agenda to transform them into enterprising entities,” he pointed out.
“In these reforms we will adopt the NMB model, which has delivered positive results operationally and in the management of the bank,” Mr Mchechu said, noting that the goal is to end subsidies to SOEs.
According to him, public entities should emulate NMB in raising funds from capital markets to finance operations and make investments.
The bank whose major shareholders are the government with a 31.8 per cent stake and Arise BV at 34.9 per cent has floated the NMB Jamii Bond at the coupon rate of 9.5 per cent yearly to raise 75bn/- with the option of an additional 25bn/- in case of sufficient demand.
The issue, which is the first tranche of a 10-year Multicurrency Medium Term Note (MTN) Programme worth 1tri/-, will also raise 10 million US dollars from offshore investors with the option of taking an extra 5 million US dollars depending on investors’ appetite.
Other shareholders of the bank are non-strategic investors and the general public whose stake in the business is 22.4 per cent and 10.9 per cent respectively.
“The ownership model to be used for many SOEs will be that involving the government, strategic investors and members of the public as its benefits can be vividly seen in the performance of NMB,” he explained.
The bank’s superb results include being the most profitable bank locally and third in the region as well as being in the list of the most efficient banks in sub-Saharan Africa.
NMB is also one of the biggest taxpayers in the country and it leads in making dividend payouts to the government, remitting 113bn/- between 2019 and 2022.
Mr Mchechu lauded the bank for the sustainability bond, which Chief Executive Officer Ruth Zaipuna said was the first in East Africa to specifically focus on green and social impact projects.
“The NMB Jamii Bond is a good initiative not only for being an investment and development opportunity but because it will also activate the stock market as we consider to allow public entities to tap into similar sources of funds and revenue,” he noted, calling for support of the ongoing reforms.
The CEO of Capital Markets and Securities Authority (CMSA), Mr Nicodemus Mkama, applauded the government for the supportive and inclusive conditions in the sector which he said SOEs should use for their prosperity.