Coronation, one of SA’s largest asset managers with more than R600bn in assets under management, has flagged visa bottlenecks and emigration are some of the impediments to growth facing the country.
The asset manager’s chair, Alexandra Watson, in a letter to shareholders published in the company’s annual report, said some of the impediments to growth include SA’s education system, government finances and emigration of skilled people.
“The fiscal and monetary positions are fragile, as a combination of escalating government debt, low growth, high inflation and policy rates leaves government very little room to move,” Watson said.
“High unemployment, skills shortages and visa issues, emigration and a failing education system are also causes of grave concern and weigh heavily on current and future growth.”
The CEO of Coronation’s rival Stanlib, Derrick Msibi, told Business Day earlier in 2023 that the flight of wealthy individuals is one of the reasons the industry will in the next two to three years face more headwinds than tailwinds.
Msibi said high-net-worth individuals continue to emigrate and externalise their wealth. The department of home affairs in October invited corporate employers to submit an expression of interest to participate in the Trusted Employer Scheme (TES), six years after it was proposed in 2017 as an innovative way to make SA an investment destination.
A company will need a minimum of 80 points out of 100 to qualify for membership of the scheme. The selection criteria include companies making an investment in the country or pledging to do so.
The government cited R500m as an example of the defined threshold of investment that must be made at the annual SA Investment Conference.
This will see a company earn 30 points. Eligible businesses must also employ at least 500 people, 60% of whom must be South Africans. This will earn them 25 points.
Watson said she is hopeful that there will be fresh impetus in infrastructure investment in the country, particularly in energy and transport.
“I write with hope that effective infrastructure investment gains impetus, as the government and the private sector have firmed up agreements, with energy and transport infrastructure as focal points,” she said.
— Coronation CEO Anton Pillay said government needs to move urgently to address the energy crisis and other shortcomings
Watson also touched on the dispute between the company and the SA Revenue Service (Sars). Coronation will in February argue before the country's apex court that Sars was wrong in how it assessed its offshore operations.
“As has been comprehensively communicated to the market, a company-specific issue that we are navigating is a difference of legal interpretation between Sars and Coronation with respect to our Irish business, one which saw us withhold the interim dividend — for the first time since listing in 2003 — and that significantly impacted our current year’s profits,” Watson said.
“This challenging chapter in Coronation’s story has been dealt with admirably by our CFO, Ms Mary-Anne Musekiwa, management and the legal team.”
Coronation CEO Anton Pillay said government needs to move urgently to address the energy crisis and other shortcomings.
“South Africans have endured 282 days of load-shedding in 2023, or put differently, in 2023, 82% of the year was affected by power outages. This is more than double what we experienced in 2022,” Pillay said.
“What is of significant concern is that our ailing power utility’s inability to keep the lights on is being eclipsed by equal challenges in the transport and water sectors, compounded by municipalities that have failed in their ability to deliver services to South Africans.”
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