After receiving a standing ovation at the Johannesburg Stock Exchange (JSE), Finance Minister Pravin Gordhan addressed the assembled crowd of CEOs and business executives, and shared some insights on the state of the economy.
Great strides have been made in discussions between the government and business leaders to find ways of lifting growth in South Africa. Discovery Invest hosted this discussion with the Finance Minister as an opportunity for business executives to interact with the government in an effort to work together towards a better future. While there is still much work to be done in finding the right synergies, South Africa is moving in the right direction and holds much respect in the international community.
In an economic environment characterised by falling tax revenue, and the threat of a credit rating downgrade, the Finance Minister’s biggest focus is on growing the economy. “I would put growth as our biggest priority,” Gordhan said, addressing the assembled crowd. This interview followed two days after Gordhan delivered his mid-term budget speech in Parliament where he revealed that, despite growth being revised down from a projected 0.9% to 0.5% for the year, there are still green shoots.
He also emphasised that to achieve economic growth, South Africans need to work together, do things collectively and rely on teams. “Don’t get caught up in an individualistic culture,” he said. He added that we do have the ability to command a collective despite our differences. “As any rugby aficionado will tell you, if you have a lousy scrum you’re in trouble.”
“We can’t keep our singular focus on what the ratings agencies are going to do,” Gordhan said, referring to the possibility of a credit rating downgrade. “Our focus must be on what the country needs and to make sure we do the right things.” He added, “If you are borrowing, are you able and willing to pay? South Africa is able and willing to pay. We have not defaulted like any other country in the world. So, we must just get the balance right between the upside and the downside.”
When asked how a broad level of business confidence could be created, Gordhan answered, “When you are in a situation like we are in at the moment, you need leadership in government. At the same time get the timing right. Leadership in this particular instance, it is needed to inspire confidence. Confidence in your country, confidence in a future and confidence in yourself, that you can influence the present to change the future. That is what is missing at the moment. Some of us are trying, some of us are close. I think we can do it. So, if we can take the word confidence out of the normal context and say what is the extraordinary thing we can do at this point in time. We are one foot away in finding a way to do it. Let’s take that step.”
Speaking at the same function, Discovery Invest CEO Kenny Rabson said that he shares the optimism Pravin Gordhan has in South Africa and that Discovery continues to invest large amounts in both existing businesses and new businesses. He added that Discovery Invest was optimistic that a downgrade would not happen in the short term, but that long-term prospects depended on economic growth. Rabson further stated that he agrees with Gordhan on the point that economic growth is needed and that there is tremendous potential to achieve this. With strong economic growth, debt numbers will become more manageable. He also mentioned that the unprecedented cooperation between the government and businesses is sure to pay off in rebuilding the economy.
About Discovery Limited
Discovery Limited is a South African-founded financial services organisation that operates in the healthcare, life assurance, short-term insurance, savings and investment products and wellness markets. Founded in 1992, Discovery was guided by a clear core purpose – to make people healthier and to enhance and protect their lives. Underpinning this core purpose is the belief that through innovation, Discovery can be a powerful market disruptor.
The company, with headquarters in Johannesburg, South Africa, has expanded its operations globally and currently serves over 5 million clients across South Africa, the United Kingdom, the United States, China, Singapore and Australia. Discovery recently partnered with Generali, a leading insurer in Europe, and has partnered with John Hancock in the US. These new partnerships will bring Discovery’s shared-value business model to protection industries in Europe and the US.
Vitality, Discovery’s wellness programme, is the world’s largest scientific, incentive-based wellness solution for individuals and corporates. The global Vitality membership base now exceeds three million lives in five markets.
Discovery is an authorised financial services provider and trades under the code “DSY” on the Johannesburg Securities Exchange.
Follow us on Twitter @Discovery_SA