Privatization of NBY [Archives:2001/40/Business & Economy]

October 1 2001

Within the framework of implementing the privatizing program in a number of institutions and banks, the Cabinet has approved the privatization of the National Bank of Yemeni (NBY) which was founded 30 years ago. The bank is one of the most successful governmental banks in Yemen in the field of developmental and commercial investment. The government’s share has been set by the Cabinet based on the new budget of the bank. 40 percent of the bank’s capital goes to the government, but the council has distributed 20 percent to the stock holders and 20 percent to the government. Sixty percent has been allocated by the bank to new strategic investing according to given criteria and conditions. A decision was adopted by the government on December 17 to conduct a financial study to privatize the NBY despite the objections made by the opposition party. These parties see that the NBY is a successful bank that has 33 branches in the governates of the republic. The official statistics point out that the financial profits of the bank are good and that the profits of the bank have increased 91 percent during the first ten months of 1999. The percent of investment increased to 37 percent in 2000. Statistics confirm that the NBY is ranked second, after the Central Bank of Yemen. This indicates that the bank’s capital is politically and not financially privatized. But the government justifies the privatization of general projects, among these the NBY, by encouraging private property among investors and decreasing its own expenses.
The privatization law adopted by the government stressed the necessity of conducting studies on privatizing the general projects under the supervision of the law on the purchasing processes, or the partial privatization or general subscription stock in order to protect the public properties from any mismanagement. It seems that the government wants to broaden the NBY’s capital for the sake of increasing banking, commercial, and investment activities. Legal sources in the opposition have warned against the privatization of the NBY’s capital. It must be mentioned here that the privatization policy and the implementation of its programs has raised controversy among politicians, economists, and sociologists. This, in turn, has resulted in the government’s delay of the privatization projects.