Cyril Ramaphosa’s inaugural State of the Nation address in February 2018 ignited the ethos and catchphrase of Thuma Mina. Taken from Hugh Masekela’s legendary song, the term has become the South African call to action that all citizens work together to create a better country. The president’s vision was simple — everyone has a role to play in changing the future of an embattled nation. This vision is equally relevant to the South African financial services sector, an industry that plays a crucial role in transformation, economy, inclusion and equality. It’s an industry that can ignite a sense of renewal and move the economy forward by helping to build investor confidence and driving entrepreneurial growth.
“South Africa needs a renewal that won’t come from a gift or a messiah but from a sense of energy and belief that each of us has the responsibility to create tomorrow,” says Arthur Kamp, chief economist, Sanlam Investment Management. “If we talk investment and growth that will catalyse our economy, then we need a new way of thinking and practising.”
Visibility and transparency are key to unlocking investment, as are certainty and stability. The challenge that the financial sector faces in attracting foreign investment is in proving that progress has been made. There needs to be increased competition and investment into the small, medium and micro enterprise (SMME) to broaden ownership and drive high-growth and labour-intensive industries to showcase transformation, inclusion and ownership.
“Certainty is the key,” says Busi Mavuso, chief operations officer, Business Leadership South Africa. “We need to ask what foundation has to be put in place to encourage investment. We have not done enough to ensure that we give this certainty to investors.”
The sector has to be careful that it doesn’t conduct the operations of the economy from the centre. The future lies with entrepreneurs who have access to capital. So how can they access this, where are the sources and what lessons need to be learned to drive inclusion? And how can those who have limited access to collateral locate alternative revenue streams to gain the funds they need for growth?
“Alongside certainty there is anotherkey quality that has to be present for investment — trust,” says Sonja de Bruyn, managing director, Identity Partners. “It is an important quality in a developing economy. We need to think more creatively and source alternative ways of finding collateral. If we look at marginalised communities, the traditional forms of collateral have marginalised them for decades. In this, all the Thuma Mina elements must be leveraged to ensure we do more for people so they gain access to funds and opportunities.”
South Africa will not achieve economic growth without transformation. In a nation where the majority of income is earned by the top 10% of the population and 10% of the income is earned by the bottom 50%, the structure of society has to change and entrepreneurship and innovation must be given room to thrive. When the financial sector talks about what can be done to make a difference the answer lies in coming together to make a change for the country and to leverage its strength as the facilitator of credit and the driver of growth.