• Wednesday, February 28, 2024
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Old Mutual eyes 15 percent profit growth in Africa


 Anglo-South African financial services group Old Mutual plc plans to raise the share of profits generated by its African business to 15 percent by the end of next year from 10 percent at present, the firm said.

The group has already spent a quarter of its $500 million kitty for investing in the continent that it announced last year, to tap the region’s fast growing economies like Kenya, Ghana and Nigeria.

“The growth area in the world is going to be in Africa over the next 30 years,” Old Mutual’s CEO Julian Roberts told reporters in the Kenyan capital, Nairobi.

“As that grows, then people will need more financial services, they will need their money to be managed … they will need the assets they buy protected.”

Multinationals are increasingly betting on Africa because of its big youth population, fast economic growth rates and abundance of natural resources like oil and minerals.

Old Mutual’s investment programme and profit projections cover sub-Saharan Africa excluding South Africa.

The acquisition of Kenyan micro financier Faulu was in the final stages and it would be concluded before the end of this quarter, Old Mutual said.

Roberts cautioned that global firms needed to invest in Africa over the long term to avoid the disappointment of short-term shocks like the volatility ravaging some emerging market currencies at the moment.

“When you have got economies that are growing, it is not going to be a straight line growth. There will be ups and downs. There’s going to be shocks,” Roberts said.