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SA is improving but we could have halved poverty by now, Leadership summit hears

Nov 01 2018 12:33
Riaan Grobler

On the back of President Cyril Ramaphosa's Investment Conference, business leaders kicked off the Discovery Leadership Summit on an optimistic note on Thursday, assuring delegates that South Africa was a great place to do business and pledging investments.

Despite the upbeat tone, however, there were calls for tough decisions and decisive leadership to manage lingering doubts, including ongoing problems at SOEs, the aftermath of Nenegate, and other gains lost over the past decade.

Ramaphosa, former US president Bill Clinton, former US secretary of state Hillary Clinton, and former British prime minister David Cameron are all scheduled to speak at the summit in Johannesburg, among others.

'Change the story'

Discovery founder and CEO Adrian Gore said South Africa was in a much better position today than in 1994, and said Discovery would be investing R13bn in various projects over the next five years.

However, he added, continued improvement would need strong leaders. "We need to have a change in the story," he said.

Executive chairperson of African Rainbow Minerals Dr Patrice Motsepe said he was confident that South Africa was a great place to do business.

Echoing Gore's views, he said it was not too late to "turn things around" in the country.

"Global competitiveness is all about efficient management," Motsepe said. "Any successful business is because of a world-class management team."

Hoping for better

Gore also spoke about elements of bias in the ways human beings tend to view their circumstances.

He argued that there is an element of declinism in South Africa - the belief that things are progressively getting worse in your country.

This is simply not true for SA, he said, quoting various statistics showing SA's growth in several areas. "We're not in decline," he said. "It's simply not true."

However, Gore said humans are by nature also influenced by an optimism bias, believing – at the same time – that their lives will improve in the future.

Despite overall growth, however, the last decade had hurt SA's prospects, he said.

He said that, if SA had grown at the rate it was growing in 2007 over the last 10 years, there "would have been 40% less unemployment and we would have halved poverty."

According to Stats SA, SA's GDP growth rate in 2007 was over 5%. 

'Last decade was useless'

Former CEO of Investec, Stephen Koseff, said the last decade was "useless".

Koseff was positive about the future, saying the shift in narrative and approach was a turning point. If executed well, this could create a growth environment, he said.

But, said Koseff, "tough decisions" still needed to be made, especially when it came to turning around state-owned enterprises.

In his view, the lowest point of the last 10 years was Nenegate, when former president Jacob Zuma fired then-finance minister Nhlanhla Nene and replaced him with the virtually unknown Des van Rooyen in December 2015.

"Can you imagine this guy representing us at the IMF or the G8?" Koseff said, to laughter from the audience.

Koseff said this was the turning point that prompted the private sector to apply pressure on government.

He believed Ramaphosa had a huge influence in former finance minister Pravin Gordhan replacing Van Rooyen a few days later, he added.

* This story has been updated to reflect that Investec CEO Stephen Koseff did not say that President Cyril Ramaphosa's Investment Conference and commitment to the economy had already made a huge difference to growth. Instead, he said that the change in narrative was a turning point and could create a growth environment. 

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