Martin Inkumbi, CEO, Development Bank of Namibia

MACIG Connect Series

Martin-Inkumbi,-CEO-BLOGCould you highlight the role that the Development Bank of Namibia (DBN) plays in the development of the Namibian economy as well as your key objectives as CEO?

Martin Inkumbi (MI): The role of the Development Bank of Namibia (DBN) is to finance economic development in Namibia, primarily by extending financial credit or loans as well as business support services to enterprises doing business in Namibia. The bank provides financing for a broad range of economic activities, including infrastructure projects, large corporate enterprises, and even small and medium-sized enterprises. DBN has a local mandate and primarily finances businesses incorporated in Namibia. We also finance cross-border transactions, export and import-related activities, and infrastructure related projects that link countries within the Southern Africa region. Infrastructure is a key focus area for DBN.

In addition, the DBN’s lending focus is aligned with the government’s development plans. The bank aims to help the country move towards the achievement of its 2030 development plan, which will unlock Namibia’s potential in agriculture, manufacturing, transport and logistics, tourism and business services. The DBN does not directly finance the agriculture sector, as government has established a special finance institution for this purpose, the Agricultural Bank of Namibia, but we have a presence in all others.

Could you highlight the main product and service offerings that you provide for the mining sector?

MI: The DBN does not provide an exclusive service for the mining industry but supports mining activities through the financing of the participation of Namibians in mining projects. The bank does not get involved at the exploration phase but can certainly finance the mining activities. We are particularly keen to support local service providers for the mining industry.

The DBN takes equity on certain projects. What does the DBN look for in a project to take this decision and up until what point does the bank become involved in a project? 

MI: The DBN only considers equity in economic projects that it considers to be of strategic economic importance to Namibia. The aim is not to become a majority shareholder in a project, as the bank would not want take over the management of the business. The bank prefers instead to remain a minority shareholder, taking a 25% to 30% stake. To date, DBN’s major equity investment is in Ohorongo Cement, for example, because it is the only cement producer using local resources to supply to the construction industry. The bank has also supported a local group, Evi Gold, in taking up shareholding in a mining project until the parties did an internal re-financing. DBN support assisted this Namibian investor acquire shares in Otjikoto mine, in the early stages, before mining activities began.

DBN provides financing for viable enterprises that contribute measurably to Namibia’s economy. What is the criterion to determine what constitutes a viable enterprise?

MI: We take a look at the level of development impact that the enterprise or project will have in the country. The number of employment opportunities that the project will create is another major consideration. In addition, the bank considers skills development, transfer of technology, and decentralization of economic activities in its decision to finance projects.

How accurate is the international investor’s perception of the mining and constructing sectors in Namibia and which elements of the country would you like to highlight to them?

MI: When it comes to mining, Namibia is known for its uranium, diamond, gold and copper resources, but it is also increasingly becoming a key transport and logistics hub for the region. Namibia has a seaport and is well connected to its neighboring countries in the region. This presents an excellent investment opportunity for those looking at transport and logistics opportunities to service the southern Africa region. The challenge has always been the small population, which does not present a strong enough market for investors and producers. The population of Namibia is only about 2 million, but it is positioned as a gateway to the region’s market, which has over 300 million people.

What are the DBN’s lending capabilities in the country?

MI: DBN is relatively a small bank and can at this stage only lend up to N$ 300 million to a single group.  However, the Bank leverage on partnerships with other development finance institutions, to finance infrastructure, industries and energy projects. There is capacity to finance multi-million Namibian dollar projects within the region.

Where would you like to see the DBN in 2 to 3 years?

MI: I would like to see the DBN having made a significant impact in financing entrepreneurs in manufacturing and infrastructure development projects, such as road and railway expansion. In mining, DBN’s main focus is to finance either Namibian participation in projects or Namibian companies providing services to international companies that are mining in Namibia.

Do you have a final message for our international MACIG readership?

MI: There are opportunities almost in every sector of this young economy. DBN will support international investors coming to Namibia. It can finance joint ventures between Namibian entrepreneurs and international investors setting up business operations in our economy.

This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2015. To participate in this report, please contact Sharon Saylor at ssaylor@gbreports.com.

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