Monday, October 26, 2020

Legislation threatens Bifm investments in Zambia

Shareholders of Botswana Insurance Fund Management (Bifm) are supposed to be punching the air with joy on the company’s diversification drive that includes expanding into markets in Africa.

However, cracks are beginning to show in investments in Zambia where a new ‘nationalistic’ asset management law might see the company surrendering its stake to that country’s citizens.
Bifm, the sister company to Botswana Life, says a new legislation that prescribes that 51 percent of shareholding in asset management outfits be given to Zambians is unconstitutional.

Victor Senye, the Bifm Chief Executive Officer, told clients recently that they have been operating in that market before the law was passed, so they intend challenging the legislation.
“Bifm has been in Zambia before the legislation. We respect any country to make rules, but it is unconstitutional. We are looking at Plan B of separating our business,” he noted.

Bifm, part of the blue chip Botswana Insurance Holdings Limited (BIHL) listed on the domestic bourse, went into the Zambian market as part of diversification drive forming Aflife Zambia with Africa Life Group.
Zambians own 30 percent of the equity, but the new law wants citizens to own a controlling stake.

“We are not keen with parting with 51 percent, but if we are going that route, then it results in a capital flow, that is fine. We are putting commercial preposition on the table,” he said.

Senye said Plan B will be to unbundle and forming a holdings company that would take care of the operations, leaving asset management on its own.

However, despite the company’s subsidiary finding it tough with the regulators in that market, Senye said that diversification is playing well with major impact in markets in Zambia.
Meanwhile, another diversification area is in the field of Public, Private Partnerships (PPPs) and investment in property.

Bifm and its consortium recently delivered the P50 million Office of the Ombudsman and the Land Tribunal while, together with another consortium, they are about to deliver the SADC headquarters.

“We need to focus on property development and investment. Currently, we are on Phase 2 of property development at Fairgrounds and we are actively involved in Zambia and recently acquired a commercial property in Livingston,” Senye said.

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