Non-financial banking services, especially the insurance sector has room for growth despite various factors hindering its full growth, outgoing Old Mutual Africa (OMA) operations managing director, Johannes !Gawaxab, says.
He cites reasons for the hindered growth as lack of access to insurance products by the informal sector.
The informal sector, !Gawaxab says, is at this point excluded from insurance products offered, as there is still little understanding of what the sector’s needs are and how to respond to them or which type of products to introduce for them. “It is not easy to understand how regular their incomes roll in or how to collect premium from them or pay their claims.”
As such, lack of innovation from the industry, as well as the minimum use of technology deters the sector’s growth.
“Government also needs to be more innovative with the regulations, to allow sectors to be more innovative with their products. For example, countries such as Kenya have allowed the financial services sector to remove import duties and taxes, thus cell phones are very affordable and every individual is capable of owning one. Furthermore, systems such as M-Pesa, which allows mobile users to withdraw, deposit or transfer money via cell phones, has had a bigger impact in Kenya and surrounding countries,” !Gawaxab explains.
The executive thus calls for domestic savings to be invested locally, a move he believes would benefit the country.
“Government has also shown concern to the fact that most savings are still exported while there are numerous opportunities locally.”
From his 16-year experience at OMA, !Gawaxab has learnt factors, such as lack of adequate skills to grow the sector remain a key challenge.
“16 years ago, access to financial services was only open to the elite. This is gradually changing as their role is to be accessible and affordable to most people out there,” the OM boss says.
By the time he joined the entity, !Gawaxab says decision-making in the insurance sector came from South Africa.
“It was not adequate for people not to be part of the environment in which they operate, as they would never understand the challenges at hand.”
For the past eight years he has been at the helm of OMA, he notes the insurance sector in SADC countries is much stronger and well-established, which he attributes to political stability and satisfactory growth of the economies in most such countries.
“The insurance sector in the East and West Africa still has a long way to go, as they have only about two percent penetration in the insurance sector. The difference is the integration and sophistication level, as well as the type of products being used in the different countries,” !Gawaxab says, adding; “In SADC countries, the insurance sector serves mostly the corporate world while in the West and East Africa, it is more inclined to family-owned businesses.”
He points out lessons he has learnt from working in different regions, with the entrepreneurship spirit being the most alive in West and East Africa and driving the countries’ development.
“Namibia can emulate those regions by creating more local businesses. As a country, we should learn how to manufacture most of the products and building on businesses, which can stand their ground locally and internationally, instead of always depending on international companies.”
As for the local economic growth, !Gawaxab highlights that as a country, there has been a heavy reliance on the Southern African Customs Union (SACU) income, which has in turn crippled the country’s innovation in terms of growth.
Although Namibia has clear plans, !Gawaxab bemoans its implementation strategies, questioning whether or not the leadership in place is adequately equipped to grow the economy as it should.
“At this point, it is questionable whether or not we have the right leadership, which can fight the challenges, grow the economy and still uplift the masses living in abject poverty.”
OMA’s growth from just four countries in 2006 to the current eight (Namibia, Kenya, Nigeria, Zimbabwe, Ghana, South Africa, Swaziland, Malawi) has been one of !Gawaxab’s highlight legacies. As if that is not enough, OMA’s profit contribution, under the leadership of !Gawaxab, has grown from N$128m in 2006 to more than N$1b in 2013 while assets under management rose from N$22b to N$64b during the same period.
Today, he notes he has always had a clear vision of what he wanted to achieve, which was “to build a well-established financial service business, a co-ordinated and integrated banking, as well as an insurance strategy with an aspiration by 2020. With the latter, we would have 10 million customers - three million in East Africa, as well as 3.5 million in West Africa and SADC region - by 2020. When I took over, most people did not understand financial services products, so providing them kept me going and my motivation also derived from wanting to deepen the customers’ proposition and experience.”
Credited for growing the group’s customer-base from 500 000 in 2006 to the current two million in the eight operating countries, !Gawaxab says some of the challenges he met during his OMA tenure included understanding the Nigerian market, which operated differently compared to others and knowing how to penetrate and offer solution products that are adequate to those markets.
Decisions, such as firing Old Mutual Kenya’s CEO and chairman of its board, he had to make as part of cleaning up the governance structures and controlling the environment for a better operation.
One of his proud moments, !Gawaxab beams, is when he managed to successfully conclude the company’s indigenisation negotiations, which were meant to comply with Zimbabwe’s indigenous policy that required all foreign-owned firms to cede majority stakes to black locals.
“Such challenges afforded me many opportunities and allowed me to grow as a global business leader. I can now stand on my own anywhere in the world, due to the experiences learnt through OMA.”
Confident his future is as bright as his past at OMA, !Gawaxab who was crowned top employer last year says he is looking forward to stepping down for better, bigger opportunities ahead.
“I have already received offers from leading companies in the United States and South Africa.” He leaves OMA at the end of this year, to join the many exemplary leaders who have chosen to step aside in leadership positions.”
As a parting shot, he says: “Namibia is a good example for Africa through its continual smooth transition of leaders. Such actions lack in Africa; we need leadership that knows when it is time to come and time to exit. Stagnation at one place for too long blocks innovation and eventually, growth”. PF