The Development Bank of Zambia (DBZ) has signed a Memorandum of Understanding (MoU) with Norsad Capital, an impact investor and private credit provider offering tailor-made debt solutions to profitable growth-stage companies.
The move promises to bolster direct investment into Zambia by supporting businesses that are committed to positive social impact.
Zambia, one of the youngest countries in the world based on median age, is undergoing a rapid demographic shift; this presents a unique opportunity for economic growth. The MoU solidifies this possibility, as growth initiatives are a key focus of Norsad Capital.
Speaking at the MoU signing ceremony at Lusaka’s Hilton Garden Inn, the DBZ’s Acting Managing Director Maybin Muyawala said this cooperation agreement couldn’t come at a better time. “We are confident that this move will bring a much-needed injection into Zambia’s economic landscape.”
The Zambian economy rebounded in 2021, with GDP expanding by 4.6%, after contracting by 2.8% in 2020 due to various macroeconomic events. The MoU aims to contribute to the growth of the Zambian economy.
“Ultimately, both our institutions are focused on providing much-needed capital to businesses which can be used to promote economic growth and improve the lives of the people in Zambia and Africa at large,” added Muyawala.
According to the terms of the partnership, the parties will coordinate on large deals, share contacts for possible business, and split an investment opportunity if the amount needed exceeds the financing capacity available from each side.
Norsad Capital, which identifies itself as an impact investor with a focus on the United Nations’ Sustainable Development Goals (SDGs), aspires to be a thematic impact investor that selects investments that clearly contribute to addressing social and environmental concerns. This is consistent with the DBZ’s objective to address inadequate and expensive access to investment capital and to eliminate micro-level structural rigidities that impede public and private investment development, productivity, wealth generation, and job creation.
“Both our organisations share the same passion for ensuring that African businesses can thrive and succeed despite prevailing circumstances. Our agreement, therefore, ensures that we can, in partnership, simultaneously maximise deal flow and social impact in Zambia,” said Kenny Nwosu, CEO at Norsad Capital.
A particularly important element of the MoU is that both parties will support each other in working to further promote the private sector’s role in growing the Zambian economy, as highlighted by Nwosu who adds: “We wish to encourage good corporate governance to promote sustainable private sector investment in Zambia.”
Nwosu also says that this serves as an opportunity for Norsad Capital to plough back into its birthplace. “It’s a full circle moment, really. Norsad was first established right here in Zambia in 1990, as a collaboration between the Nordic and Southern African Development Community (SADC) governments, and it operated as a multilateral agency based in Lusaka, Zambia.
In 2011, we transformed into a limited liability company, Norsad Finance, incorporated in Botswana and accredited by the International Financial Services Centre. And here we are, in 2022, having rebranded to Norsad Capital in line with our strategy to scale and deepen our impact throughout the continent.”
