Greece is the word

Organisers of the Institute of Retirement Funds Africa (IRFA) conference in Cape Town could not have anticipated the dramatic backdrop which events on the international monetary stage would bring to its opening.

“Unfortunately, I am short of sleep. I was staying up watching what was going on in Greece […] I think it could have some major ramifications for the world as we know it,” Econometrix director and chief economist Dr Azar Jammine told delegates at the start of his keynote address, delivered shortly before 9am on Monday.

Hours earlier, news had broken that over 61% of Greek voters had rejected austerity demands by the EU and other creditors, and the country now faced possible ejection from the eurozone.

“I think history’s currently being made. I think the Greek people showed two fingers to the Europeans,” Jammine told the fund managers, strategists and senior officials from the Financial Services Board and Pension Funds Adjudicator, who were among those attending the two-day conference.

The Institute of Retirement Funds is a non-political body representing the interests of the retirement industry in Southern Africa. It represents the industry in negotiations with government and the Financial Service Board, including commenting on legislation and tax matters affecting retirement funds.

What is being referred to as the Greek debt crisis is causing alarm on world financial markets; many dropped sharply on Monday, following the announcement of the referendum results.

Jammine said an unravelling of the eurozone might affect the South African economy through reduced demand from Europe, which would impact exports to that continent, as well as increase risk aversion towards emerging markets, “and that in turn could see the rand falling more steeply than has been the case, with the possibility of rising interest rates”.

The theme of the IRFA conference, which focused on the role of pension funds in economic development, macro challenges facing the industry and achieving financial security in emerging markets, was “Expanding Horizons”.

Jammine urged his audience to “hold your thumbs” over the coming days.

“What’s going on in Greece does have international ramifications. In the short term, there is likely to be a lot of nervousness on markets. The value of your pensions have probably decreased by about 0.5 to 1% today,” he said.

IRFA president Zamani Letjane said delegates would be exploring and debating “issues surrounding retirement and investment in emerging markets, and more specifically the African continent”.

In an interview shortly after the opening, he said workshops at the event were set to examine a “mixed bag” of topics, including the so-called Twin Peaks legislation.

Asked to name the biggest challenges currently facing the sector, he said these included “development” of pension fund trustees, member development and training, and legislative procedures.

Others at the conference focused on restraints affecting the country’s economic growth.

Investec Asset Management economist and strategist Nazmeera Moola singled out electricity supply: “The single biggest constraint in South Africa is electricity.”

She said electricity-intensive manufacturing in the country was “shutting down”.

“We’re now in a situation where we’re seeing businesses increasingly starting to make a decision on expansion, saying ‘we can’t expand, we’re not comfortable on electricity supply’. That is a constraint we need to resolve, and we need to resolve quickly.”

The tight power supply would crimp economic growth.

“Until we [resolve the power supply problem], the numbers that we need to be thinking about in terms of South African growth is 2% for the next five years, which is not good news if you’re looking at companies that are only dependent on South African GDP.”

She further noted that national treasury’s forecasts for growth had dropped over the past five years.

“In 2010, they were expecting growth to start at 3.1% and head up to 4.5% over the next three years. By the time we got to last year, they were predicting growth for this year of 2.5%, heading up towards 3%. The 2015 Budget was even lower.

“The SA Reserve Bank has subsequently released forecasts that they think potential GDP growth in South Africa over the short term is 1.5 to 2%.”

Moola said the US dollar was likely to continue strengthening.

“We’ve had quite a big appreciation of the dollar over the course of the past 18 months, and it’s tempting to start thinking it has run its course.

“But if we put this in a longer time scale, we see the appreciation that has happened with the dollar over the past 18 months brings it towards the above average, but not the expensive side of history.”

She too touched on events in Greece.

“The euro is in a great deal of trouble … There is a real chance that Greece will leave the euro … the real concern is whether it will have knock-on effects,” said Moola.


Eight funds won pension industry trophies and 11 were awarded gold certificates at an Institute of Retirement Funds Africa (IRFA) dinner in Cape Town on Monday evening.
The trophies and certificates, all for best practice in various aspects of pension management, were awarded to:

• Road Freight and Logistics Industry Provident  Fund, which received a trophy and gold certificate for its stakeholder communication strategy;

• Tourism Hospitality and Catering Pension Fund, which received a trophy and gold certificate for its stakeholder communication strategy;

• Independent Schools Association of Southern Africa, which received a trophy and gold certificate for its stakeholder communication strategy;

• Natal Joint Municipal Pension/KwaZulu-Natal Joint Municipal Provident Funds, which earned a trophy and gold certificate for its stakeholder communication project, and a further trophy and certificate for trustee development; 

• Government Institutions Pension Fund, which was awarded a trophy and gold certificate for its “Well Being” stakeholder communication project, and a second gold certificate for its “Biometric ID” communication project;

• SA Broadcasting Corporation Pension Fund was awarded a trophy and gold certificate for its stakeholder communication project, and a second trophy and gold certificate for its investment practices.

• Old Mutual Umbrella Fund was awarded a trophy and gold certificate for its fund governance; and

• Cape Retirement Fund for Local Government was awarded a gold certificate for its stakeholder communication project. 

Eight funds were also awarded “special mention” merit certificates for various aspects of their business. 

These included the Mineworkers Provident Fund, which received two certificates; Cape Retirement Fund for Local Government; Natal Joint Pension Fund/KwaZulu-Natal Joint Municipal Provident Funds (three certificates); Government Institutions Pension Fund; SA Broadcasting Corporation Pension Fund; Cape Joint Pension Fund; Tourism, Hospitality and Catering Pension Fund; and the Independent Schools Association of Southern Africa.

IRFA’s 28 th annual conference was held at the Cape Town International Convention Centre from July 6 to 7.

The institute is a non-political body that represents and promotes the interests of the retirement industry in Southern Africa. — Richard Davies

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

WiMSA shines a light on the future of women in mining

Men in mining must begin to take it upon themselves to support the development of women in the industry

As opposition mounts, Zimbabwe’s president lashes out

Emmerson Mnangagwa has accused ‘dark forces’ of destabilising the country

Department of Public Works and Infrastructure reveals second gender-based violence advocacy artwork

The men and boys of South Africa are important role players in this mission to ensure that women are respected, protected and treated equally

Empowering the voice of women in leadership to enable full participation in their roles in leadership and decision making

Sibanye-Stillwater has 13% female representation in its workforce and is actively working to achieve gender equality and empower all women and girls

Surviving the tobacco ban

Nicotine is given as the ‘likely’ reason for lower Covid-19 infection rates but authorities still stress the health risk of smoking

Smokers hold thumbs for cigarette ban to be lifted

SATTA is worried about the impact of the ban on its own members activities and how the ban is helping black marketeers to make millions of rands illegally

The PPE scandal that the Treasury hasn’t touched

Many government officials have been talking tough about dealing with rampant corruption in PPE procurement but the majority won't even release names of who has benefited from the R10-billion spend

ANC still at odds over how to tackle leaders facing...

The ANC’s top six has been mandated to work closely with its integrity committee to tackle claims of corruption against senior party members

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday