LUSAKA, ZAMBIA, August 27, 1998 --- The
International Finance Corporation today signed an agreement to invest up
to US$400,000 in NICO Insurance Zambia Limited (NICOZAM) in Lusaka to establish
a general insurance company providing short-term property and casualty
NICOZAM’s general insurance business will include a comprehensive range
of fire, accident, and motor insurance. It will design innovative
products tailored to meet local demand, and will bring competition and
new ideas to a market that has operated for decades as an uncompetitive
nationalized industry. NICOZAM is also expected to become an important
intermediary for mobilizing funds for short-term and long-term investments
in the Zambian market.
Mr. Cesare Calari, Director of IFC’s Sub-Saharan Africa Department noted
that, by supporting the growth of a credible, specialized financial institution,
IFC is contributing to the further deepening of Zambia’s financial sector
and assisting in the promotion of sustainable, private sector-led growth.
He added that the project had become possible because of the increasingly
market-friendly and liberalized economic environment in Zambia.
IFC’s investment accounts for 25 percent of the company’s share capital
of US$1.5 million. IFC intends to divest 5 percent of its shares
to Zambian investors in the future.
The National Insurance Company of Malawi (NICO) Limited, Malawi’s largest
insurance company, is the main sponsor and technical partner in the project
with a 60 percent stake. Guardian National of South Africa (which
owns 26% of NICO), one of South Africa’s leading insurance companies,
and FCA Investments, a Texas-based investment firm, will each have a 10
percent stakeholding in NICOZAM.
The agreements were signed in Lusaka by Mr. Mike Tiller, IFC’s Regional
Representative for Southern Africa, Mr. J.M. Mwanakatwe, Chairman of NICOZAM,
and Mr. F. Mlusu, Managing Director of NICO.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets and providing technical assistance and
advice to governments and businesses.