Old Mutual Malawi has opened a special investment window targeting non-traditional investment avenues to help foster socio-economic activity and propel growth of the economy.
At its inception, the window, dubbed Alternative Investment, targets three sectors of the economy including agriculture, private equity and infrastructure development.
It comes amid concerns that the country has had over K1 trillion worth of pension assets, presumably lying idle, a narrative the firm says it intends to challenge through the initiative.
In Malawi, about 45 percent of pension funds were reportedly invested in shares listed on the Malawi Stock Exchange while a further 29.6 percent was invested in Malawi Government Debt Securities, with 10 percent invested in fixed deposits.
Old Mutual Malawi Board Chairperson Ronald Mangani said the firm intended to broaden its investment scope from stocks and other money market products.
He said, through this, Old Mutual was creating a platform that would not only allow an increase in the returns clients would get, but also directly contribute to social economic development.
He said the investment drives would help in job creation and the production of services and goods, for instance in the agriculture sector, that will directly feed into increasing gross domestic product and creating foreign exchange for the country.
“This is a vehicle that we have created, as Old Mutual, to channel the funds that we receive from our clients to different ways of investing those funds through investments that are not traditional.
“Traditional investments have limitations. And the returns we earn from such are limited also; they are constrained. Apart from earning limits returns, their impact on the economy is also very indirect,” Mangani said.
Reserve Bank of Malawi Governor Wilson Banda, who grace launch of the Alternative Investment in Blantyre on Thursday, rated the move highly.
“There is a need for investments in the energy, transport and all sectors. We need more investors in the economy,” Banda said.
Among other areas, the firm has already invested in 6,000 hectares of macadamia farm land offering a thousand jobs where the firm is supporting the transformation of former tobacco fields as a way of diversifying production.
Under the infrastructure banner, the firm has concluded students housing for 154 students at the Lilongwe campus of the Kamuzu University of Health Sciences.