Differentiating between the two — Old Mutual as the anti-GSK

There has been a trend of foreign companies leaving Nigeria for good reasons. The fundamentals are not right. However, most of those leaving are those whose inputs are being battered by Nigeria’s issues, such as power and forex. Some other companies are taking steps to protect themselves but are not leaving. It is crucial to be able to differentiate so we don’t cause the kind of panic that will crash the entire system, which is not good for any of us.

The recent announcement by Old Mutual falls into the second category, but I’ve read a lot that tells me folks think it’s in the first.

A little bit of the recent history: In 2013, Old Mutual Nigeria Life Assurance came into existence after NAICOM approved its acquisition of Oceanic Life Insurance, a former subsidiary of the defunct Oceanic Insurance Company, by leading South African insurer Old Mutual. In 2024, a strategic manoeuvre aimed at optimising capital allocation and pursuing focused growth across Africa has led to plans to sell the company and its life and general insurance operations in Nigeria to the Emple Group. This decision marks another significant step in Old Mutual’s strategic withdrawal from select African markets following the recent sale of its short-term insurance subsidiary in Tanzania earlier this year.

The move is part of Old Mutual’s overarching strategy to reassess its presence beyond its South African stronghold and redirect its focus towards markets offering greater profitability and growth potential. While the financial details of the transaction remain undisclosed, the sale underscores Old Mutual’s commitment to streamlining its operations and optimising its portfolio.

This strategic realignment allows Old Mutual to concentrate on infrastructure investments through its Africa Infrastructure Investment Managers arm that develops and manages private equity infrastructure funds designed to invest long-term institutional unlisted equity in African infrastructure projects. It looks to keep leveraging opportunities in the burgeoning Nigerian infrastructure sector.

As part of its revised business perimeter, Old Mutual will limit its insurance operations within West Africa to Ghana for the time being, citing strategic reasons. The acquisition by Emple Group will be accompanied by a well-defined transition plan to ensure business continuity, with the existing team retained to uphold service excellence.

In my view, Old Mutual’s divestment of its Nigerian insurance operations represents a strategic shift towards infrastructure investment, which we badly need.