Sanlam CEO’s post-poll wish-list

Sanlam CEO Paul Hanratty warned against populist policies that could undermine fiscal and monetary discipline after the election, saying whoever wins, must push through sensible and sustainable policies to boost growth and alleviate unemployment, poverty and inequality.

“We would really like to see a policy that is sensible, sustainable and consistent, and therefore can support [SA] long term,”

Hanratty said in an interview with Business Day last week.

“We have to be wary and see no populist policies coming to the fore because we’ve managed our fiscal and monetary position well ... It’s one of the jewels in our crown and we must maintain those disciplines, whatever the outcome of the election.”

SA has a credible central bank that has kept inflation under control, and a finance minister whose commitment to fiscal discipline recently won praise from business leaders such as outgoing FirstRand CEO Alan Pullinger. But the fiscal deficit — at 4.9% — is dangerously wide and the debt burden is among the heaviest in emerging markets at about 74.7% of GDP.

Hanratty, who took the helm at Africa’s largest insurer at the height of the Covid-19 pandemic in July 2020, said he hoped to see the government tackle the energy and logistics problems as well as the crime and corruption issues that had plagued the country for years.

Hanratty’s wish list is similar those of many business leaders and investors, who are looking for stability and certainty from the next administration. The ANC is widely expected to lose its electoral monopoly in the May 29 elections, several polls have shown, pointing to a major shift in the political landscape that would throw SA into coalition politics on a national level — uncharted territory.

The outcome of the vote will have implications for Sanlam,

4.9% SA’s fiscal deficit — paired with a debt burden of 74.7% of GDP, that makes SA shoulder one of the heaviest emerging market debt burdens.

which is branching out elsewhere on the continent and in Asia but still derives the bulk of its earnings at home.

Hanratty described its SA earnings base as established and cash-generative, to support its growth plans and keep shareholders on his side with decent dividends. In the year to endDecember, Sanlam painted a rosy picture of the 2024 outlook, citing its strong cash generation and the diversity of its products, geography and market segments.

Still, Sanlam’s fortunes are intertwined with those of SA, and the country’s troubles are deterring potential investors abroad who could inject muchneeded foreign direct investment into the ailing economy.

Hanratty said he interacted with a lot of overseas investors who were interested in the stability of the currency, the growth potential of the country and credible plans to fix the logistics and energy systems.

“They do not view us as a failed state, but they are concerned about the power issue that hampers productivity.”