The Development Bank of Zambia (DBZ) has signed an MoU with Norsad Capital, an impact investor and private credit provider that provides tailored debt solutions to profitable growth-stage companies. The move is expected to boost direct investment into Zambia by assisting businesses committed to positive social impact.
Zambia, one of the world’s youngest countries by median age, is experiencing a rapid demographic shift, which presents a unique opportunity for economic growth. The MoU cements this possibility, as Norsad Capital prioritizes growth initiatives.
Acting Managing Director Maybin Muyawala of the DBZ said at the MoU signing ceremony at Lusaka’s Hilton Garden Inn that the cooperation agreement couldn’t have come at a better time. “We are confident that this move will inject much-needed liquidity into Zambia’s economy.”
Zambia’s economy recovered in 2021, with GDP increasing by 4.6% after contracting by 2.8% in 2020 as a result of various macroeconomic events. The agreement aims to help the Zambian economy grow.
“Ultimately, both of our institutions are focused on providing much-needed capital to businesses that can be used to promote economic growth and improve the lives of Zambians and Africans in general,” Muyawala explained.
The parties will coordinate on large deals, share contacts for potential business, and split an investment opportunity if the amount required exceeds the financing capacity available from each side, according to the terms of the partnership.
Norsad Capital, which describes itself as an impact investor focused on the United Nations’ Sustainable Development Goals (SDGs), aspires to be a thematic impact investor, selecting investments that clearly contribute to addressing social and environmental concerns. This is consistent with the DBZ’s goal of addressing insufficient and costly access to investment capital as well as eliminating micro-level structural rigidities that impede public and private investment development, productivity, wealth generation, and job creation.
“Because both of our organizations share the same passion for ensuring that African businesses thrive and succeed despite prevailing circumstances, our agreement ensures that we can, in partnership, maximize deal flow and social impact in Zambia,” said Kenny Nwosu, CEO of Norsad Capital.
A key component of the MoU is that both parties will work together to further promote the private sector’s role in growing the Zambian economy, as Nwosu emphasizes: “We wish to encourage good corporate governance to promote sustainable private sector investment in Zambia.”
Nwosu also claims that this is an opportunity for Norsad Capital to reinvest in its roots. “Norsad was founded 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.
Norsad Finance, incorporated in Botswana and accredited by the International Financial Services Centre, was formed in 2011, and we rebranded to Norsad Capital in 2022, in line with our strategy to scale and deepen our impact across the continent.”