Sanlam Developing Markets (SDM), a subsidiary of South African financial services group Sanlam, is to buy a 49% stake in Malawi’s NICO Life Insurance Company Limited in a deal believed to be around MWK1.7 billion (US$11 million).

NICO Life is a wholly owned subsidiary of Malawi Stock Exchange listed NICO Holdings Limited. The company’s head office is in Blantyre and branch offices in Lilongwe and Mzuzu. The insurer offers a range of individual life and group life products. It is also pension administrators to a number of companies, organisations and statutory corporations in Malawi.

NICO Holdings said in a news article posted on its website that it believes the deal will be beneficial as Sanlam will make available to NICO Life technical and actuarial services, bancassurance and information services as well as staff training including attachments to staff offices.

Sanlam has operations all over South Africa, as well as in India, Australia and Europe, and also in other African countries such as Namibia, Nigeria, Uganda, Botswana, Kenya, Ghana, Tanzania and Zambia.

According to the Daily Times newspaper, the African Development Bank (AfDB) recently said that although Malawi has registered remarkable economic achievements over the past first five years, the country faces a number of key economic challenges, which must be addressed for the country’s economic sustainability.

Frank Kufakwandi, outgoing AfDB resident representative said in an interview that obstacles standing in the way of Malawi’s future economic development include dependence on tobacco, international transport connections, dependence on rainfall for agriculture and limited private sector contribution to the economy.