Adrian Gore, CEO of Discovery, was one of the superstars of the investment conference held last year. Ever the optimist, he held the fort, telling Doubting Thomases that South Africa is a great place to invest.
The country had tremendous potential, he said.
“Assets are underpriced, opportunities are overlooked and underpriced and people are distracted — I think that is the opportunity in South Africa. The economy is less risky than people tend to think. Forget about emotions and opinions — look to crunch the data,” Gore urged his audience.
“The economy is relatively well placed to weather the economic storm. Of course, there are tremendous risks in there, but it does demonstrate the scale of the economy.”
He went on: “We are kind of suffering from a situation where the narrative is dramatically worse than the reality. While in the short term that offers arbitrage opportunities, in the long term it has a causal effect by retarding investment, and creates a pessimistic, declinist mindset that is very detrimental.”
Optimism is a great trait in a business leader. In fact, it’s the glass-half-full approach that makes these leaders great.
Gore is undoubtedly one of the pioneers of the post-1994 South Africa. Discovery is one of the companies that have been built thanks to the environment the ANC initiated in 1994. A decent middle class created by the party provided paying clients for Gore’s company.
A failing public health infrastructure means there are millions of Discovery members hanging on to their medical aid cards for dear life and praying they never have to set foot in a public hospital. Our public hospitals are death factories. Only last month we saw babies being placed in cardboard boxes in a Mahikeng hospital, presumably because there are no proper cribs.
It is normal in public hospitals for someone with tonsillitis to sit alongside an advanced-stage oncology patient.
The likes of Discovery have walked a different path to growth and success.
Other companies also benefited from the initial post-apartheid boom under the ANC, including PSG Group, with associated companies such as Capitec and Curro; Aspen Pharmacare; and Bidvest. All are emblematic of an enterprising culture. But sadly, no-one has emulated the success of this cohort in recent years.
Even the talk of building black industrials is starting to sound more like propaganda than a real programme.
What will save us from the bad NHI is President Cyril Ramaphosa’s intervention. He can send the bill back to parliament for reconsideration. Or he can do what he does best: let it gather dust in his in-tray
It is a cruel irony that Discovery faces an existential threat because of the National Health Insurance (NHI) Bill passed by parliament this week.
From foreign policy to health matters, the ANC is progressing at Gautrain speed in destroying the economy. Companies such as Discovery and the banks are in a tailspin about the possibility of US sanctions. This might be an unlikely development but it would be highly disruptive if it did happen, and businesses have to plan accordingly.
Gore, one of the most optimistic business people in South Africa, now faces the reality of the ANC: it is a party bereft of capacity to make sound policies. A wise man once told me that in an environment of no policy consistency, “leadership is policy”.
What will save us from the bad NHI is President Cyril Ramaphosa’s intervention. He can send the bill back to parliament for reconsideration. Or he can do what he does best: let it gather dust in his in-tray.
Meanwhile, Gore and his peers have to persuade investors their companies would grow even if the NHI was implemented. Of course, not many people will believe them.
The NHI is expropriation by another name and consistent with ANC economic mismanagement strategy: run everything into the ground and then look around for “white monopoly capital” to provide public services. The same approach is demonstrated by the proposed racial water quotas.
None of these ideas and bills is implementable. Yet they create incredible insecurity and uncertainty.
Some commentators have suggested that the NHI is being rammed through now because of the elections next year. Maybe, but we should not always attribute bad decisions to Machiavellian political strategies. The ANC has not produced good policy for a while, and the reason might just be plain incompetence.
* Mkokeli is lead partner at public affairs consultancy Mkokeli Advisory
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