By Mots’elisi Sekonyela
MASERU
The Lesotho Post Bank signed a Memorandum of Understanding with Norsad Capital, Botswana to foster collaboration between the financial giants. The signing took place on February 17 at an event held for stakeholders in Maseru.
The Chief Investment Officer at Norsad Capital, Nathaniel Nyika said Norsad Capital is an impact investor and private credit provider that offers tailor-made debt solutions to mid-sized companies in Africa.
Norsad Capital is based in Botswana as an international financial services center company regulated by the Non-Bank Financial Institution Regulatory Authority of Botswana.
Nyika said the company’s investment coverage is the entire Sub-Saharan African region, with a principal dominance being the Southern African Development Community (SADC) region.
Norsad Capital has Over 33 years in operation since it was founded in 1990 as a collaboration between the Nordic countries; Denmark, Finland, Iceland, Norway, Sweden and 11 SADC member states, hence the name “Norsad” which represents both founding regions.
The company is owned by the founding countries’ nominated financial institutions like the Lesotho Post Bank that represents Lesotho, and is therefore a shareholder.
In over 30 years of its existence, Norsad capital has invested over half a billion USD in African countries with over 150 companies in Sub-Saharan Africa. The key sectors of focus are financial institutions, food value chain, soft and social infrastructure and industrial manufacturing.
The company’s purpose as stated by Nyika is to build a better Africa through the successful implementation of MOUs such as this.
The Minister of Communications, Information, Science, Technology and Innovation Hon. Nthati Moorosi, speaking at the event said this occasion is a stellar example of the kind of innovation solutions that align with the government’s focus on transformative and sustainable economic development.
Moorosi said Lesotho with a population of about 2.1 million people stands at the Gross Domestic Product (GDP) of about 2.5 billion USD. She says the unemployment rate is above 30%, and this is something the government is concerned about. The Minister said there is need for job creation in Lesotho to support small businesses which she said contribute around 90% of the total labor force in the country, and commended these businesses for their efforts in helping the government curb unemployment.
However, Moorosi said the COVID-19 pandemic devastated these efforts as many small businesses had to close down.
“There is need for socio-economic recovery, especially in key sectors such as manufacturing and textile, agriculture, tourism and recreation. The government is working on plans to uplift these sectors, and collaborations such as this are indicators of the financial industry support for the country’s economic development,” Moorosi said.
Furthermore, Moorosi said she is pleased that the Lesotho Post Bank’s long standing relationship with Norsad Capital will be of aid in the socio-economic efforts of the government of Lesotho.
In explaining the shareholding history of the government of Lesotho in the company, Moorosi said it dates back to Lesotho being one of the 11 SADC founding members of Norsad Finance in 1990, before it rebranded to Norsad Capital in 2022.
Moorosi said the company’s investments always closely align with the needs of the SADC region.
“This is encouraging for our government because it indicates a common basis for collaboration and partnership within the two countries’ governments as the journey progresses,” she said.
In closing, the Minister commended the Lesotho Post Bank and Norsad Capital’s ongoing relationship that continues to bring about innovative solutions. She assured the willingness of the government to provide any kind of resources that may be needed in ensuring the successful implementation of this MOU.
The Norsad Capital CEO, Kenny Nwosu said the MOU sets out the terms of the partnership between the organization and the bank primarily around code transactions for increased investments. Nwosu said they have their own individual expertise in funding models and together can find broader and more comprehensive insights through financing collaborations.
He said through this partnership, they will introduce each other to potential transactions and seek to share wisdom.
“It is strategic for Norsad Capital to have a partner on the ground in Lesotho that can provide context on the businesses the organization may consider for investment within the country” Nwosu said.
The company CEO said in 2020 the company embarked on a strategy development process to define the way forward for the next decade with the goal of impacting a 100 million African lives.
As an impact investor, Norsad Capital aims to build a better Africa by supporting companies that deliver such impact through services and employment they provide.
Nwosu said sustainability is at the heart of their development mandate and guides their impact initiatives that include “focus on sustainable livelihoods” which is about contributing to employment creation and boosting capacity to allow people to provide for themselves. “Focus on financial inclusion” is about ensuring access to affordable and useful financial services while “focus on gender equality” is about embracing general female representation across the SADC region and “focus on climate and clean energy” about supporting a just and green transition in Africa.
The Norsad Capital investments are said to align with the United Nations Sustainable Development Goals (SGDs).
Nwosu also said the company through its investments hopes to dive into untapped industries within the Sub-Saharan Africa.
“We see that access to finance remains a key bottleneck to growth in our markets. Our markets in the SADC region are under-served, yet there are enormous business opportunities
“We want Lesotho to benefit in this numerous opportunities that we want to tap into. Therefore, we are looking to work more closely with the long-established, honorable and paced partners to provide funding and create impact. Lesotho Post Bank is a long established partner that has seen the growth and evolution of Norsad Capital,” he said.
In conclusion, the company CEO said he believes this is the start of many, successful partnerships between Norsad Capital and the Lesotho Post Bank and hopes that the future partnership opportunities will allow them to impact more African lives and built a better Africa.
Speaking on behalf of the Lesotho Post Bank, the Managing Director, Molefi Leqhaoe said this signing is of the most important document that is going to help Basotho and grow the economy.
“The Memorandum of Understanding that we are signing today is so important to us as the nation, more importantly the private sector,” he said.
Leqhaoe thanked the board of directors of the bank for their support in this initiative. He said this MOU marks the strengthening of the already existing relationship between the two organisations and the expanding of the scope of collaboration between them.
“I want to put emphasis on the word collaboration because the most critical thing that is affecting the economy of Africa is lack of the collaboration spirit. This decision that was taken by the Nordic countries to partner with SADC countries for this purpose was a very noble decision because it inspired collaboration,” Leqhaoe said.
In explaining some of the benefits of the Lesotho Post Bank being a shareholder in Norsad Capital, Leqhaoe said the bank is already getting dividends which they plan to avail to the bank’s customers instead of just concentrating them within the bank.
“Most of our customers are small business owners and we plan to extend a helping hand, as the honourable minister has said that most of the employment in this country comes from small business owners,” Leqhaoe said.
In conclusion, the Lesotho Post Bank Managing Director said the relationship they have had with Norsad Capital has been a fruitful one and the MOU indicates the deepening of their collaboration and that they are considering more innovative ways in which they can partner so as to bring about impact to Basotho.