Monday 12 April 2021
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Old Mutual’s African homecoming

Despite the African economy having teetered on the brink the past few years, Old Mutual stands firm in its resolve that the continent is indeed on a growth trajectory and therefore it took the bold step to move its primary listing from London to Johannesburg.
Group Chief Executive Officer of Old Mutual Namibia Kosmas Egumbo describes the move as a signal of its commitment to and a vote of confidence in the southern African financial markets.
The decision to shift the primary listing came after the company was unbundled from Old Mutual Plc. When the company was demutualised in 1999, it meant that all of its senior leadership was moved to the UK as well as the primary listing.
“We began reviewing the business and recognised where the revenue came from and acknowledged trends of what investors want, we came to the conclusion that there is need to align our focus areas to practices that will unlock shareholder value,” said Egumbo.
At 173 years Old Mutual has become a giant in the financial sector, but the recent performance of the African economy is one that cannot be overlooked by any investor.
While acknowledging the current economic struggles of the continent, Egumbo remains confident that the future for Africa is bright.
“We take a long term view to things. As you may know, countries and economies go through different cycles, if you take a long term view of Africa by considering the population and youth percentage, that in itself is an indicator that the market will growth and it is full of potential. The sectors where growth is experienced and the improving levels of education on the continent is another key growth indicator. Africa has a progressive demographic composition,” said an optimistic Egumbo.
Egumbo said the company wants to unlock value to efficiently utilise capital in the business which will allow the businesses as well as its shareholders to grow.
As an outcome of the listing, Egumbo said the scrutiny of businesses in southern Africa will increase due to the proximity of the listing.
“Customers should not expect the listing changes to have negative impacts. We will continue to deliver at levels that we have been delivering. We will also review our risk and governance frameworks so that they are better applicable to the new jurisdiction,” he assured.
He emphasised that Old Mutual is determined to maintain its market leading position by constantly meeting the needs of its stakeholders.
Employment levels have a major bearing on the operations of the company, and with unemployment being rife on the continent, questions have been raised about Old Mutual’s decision to move its primary listing from Europe to job-starved Africa.
“Old Mutual has over 300 000 customers, of which over 250 000 are retail customers, that[retail] base has increased and is not heavily reliant on the formally employed people anymore. All we need to see is proof of regular income and affordability. We have seen that SME’s and retail customers are on the increase. Big corporates have not been increasing but we have seen people who are taking more risks by venturing into entrepreneurship. We are cognisant that they have financial needs and we want to partner them to meet such needs,” Egumbo said.
He also noted that whilst unemployment is high: “Statistics indicate that more and more people are attaining tertiary education which obviously brings better opportunities to create employment and income generating ventures.
Egumbo also welcomed the gradual recovery of commodity prices and lauded the Namibian government for responding positively by insisting bullishly on domestic value addition.
He said there is however a need to look into the country’s education system with a clear understanding of what the needs of the economy are so that resources can be redirected to equip Namibians with the skills to meet that meet the job requirements.
This, he says, will unlock opportunities that feed existing industries.
Egumbo also underscored the need for targeted skills that will enable people to unlock trapped wealth.
Old Mutual Limited is also going to be listed in Zimbabwe, Namibia and Malawi and it would continue to focus on the emerging markets in which the company has a significant presence already.
The managed separation announced by Old Mutual chief executive Bruce Hemphill in 2016 entailed breaking down the group into four separate entities to unlock and create value for shareholders.

Finance minister Calle Schlettwein was one of those who hailed Old Mutual’s return to the JSE, saying the business repositioning is a monumental frog-leaping of Old Mutual business proposition.
“Maintaining wide footprints on the African continent is an illustration of Old Mutual Limited continued confidence in the regional economy and in the new Africa growth narrative,” said Schlettwein last week.
He said the African growth narrative is one that is spurred by a growing middle class, an increasing demographic dividend and greater integration.
“Africa has adopted Agenda 2063, a continental socio-economic development blueprint, anchored on unleashing local economic development potential across the continent and embedded in the Sustainable Development Goals, a global agenda for growth, jobs and the eradication of extreme poverty,” the country’s purse manager said.

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