allAfrica.com: Africa: Old Mutual's Expansion in Africa is Inevitable (Page 1 of 2)

How Extensive Are Old Mutual Operations in Africa?

As an international financial services company listed on the London Stock Exchange, we are in 49 countries. Our operations span the United States, Europe, Asia Pacific and Africa. In Africa, we are currently operating in six countries: South Africa, Kenya, Zimbabwe, Malawi, Namibia and Swaziland.

Currently, I am in charge of Old Mutual operations in all the African countries where the company has a presence, except South Africa.

Our core services are insurance, asset management, unit trust, property market products and pension fund business.

How come Old Mutual is only in six African countries? What is so unique about these countries?

These countries offer attractive business opportunities. If you look at the microeconomic environment in Africa, the economic growth, how we do business in Africa and at the inflation environment, you realise that the key macroeconomic fundamentals are all of a sudden improving on the continent. Even democracy is improving in Africa.

So we decided that we are going to use the African countries where we have a presence as our launching pad to the rest of the continent. We hope to be in 10 African countries by 2012. We have identified these countries to be in East and West Africa, and in the SADC region.

In East Africa, we are going to use Kenya as a platform to expand into Tanzania and Uganda.

Any plans for Rwanda and Burundi?

We had a visit recently to Rwanda and apparently it is very easy and attractive to do business there. There is a very friendly business environment in Rwanda. It seems to me that Rwanda could be a potential entry point in for Old Mutual in East Africa.

What really makes Old Mutual tick in the financial services sector?

We have a strong brand. It conveys a message of quality investment and integrity.

We also make good our promises. If you invest with us, you are assured we are going to take care of that money, grow it to the level you want and return it to you whenever you require it. Apart from that, we are innovative in our range of products. We monitor changes in the market and provide products as the market demands. We always strive to offer excellent services to our clients.

What is your view on the capital markets in East Africa in particular, and Africa at large?

In terms of development, we have the basic operations in place. But in terms of depth and breadth, a lot still needs to be done. For example, if you look at the bonds market, there are few parastatal or commercial papers on issue. There are very limited hedge funds, for instance.

The missing link here is a broad capital market that goes beyond the basics .

How can this be achieved?

First, one needs to look at the requirements of the local market. In Kenya, for example, there is the Vision 2030 that has a strong focus on infrastructure development. It identifies about 54 projects but you cannot get the government to fund all the 54 projects. Possibilities of listing an infrastructure bond are missing. Yet this is one way of make capital available for some of these projects. This calls for discussion between industry players, regulators and the government.

Could you comment on the bond market in Africa.

The bond market in Africa is a very attractive one. Unfortunately it is also untapped. In East and West Africa, the bond market is almost underdeveloped.

What has been holding it back?

It has much to do with market development. The market players (parastatals), regulators and governments need to get together and make deliberate efforts to develop the capital market. Market players have to take the initiative and develop the capital markets.

How well has the capital markets in East Africa been regulated?

Currently, there are basic regulations in place. Some of these regulations are however outdated and obsolete and do not respond to the changing market requirements. Just look at how money moves today. Money has no borders anymore. For regulators to keep pace with these changes, they need to update some of these regulations.

What are some of the changes that need to be made to keep pace with the changing market trends?

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