No competitive edge without good education
SOUTH Africa had to focus on providing quality education for the poor if it wanted to improve its competitiveness, Patrice Motsepe said this week.
Speaking at a Sanlam Africa investment management conference in Cape Town, Motsepe said government needed to foster an environment that would enable the “private sector to thrive” — and key to this was innovation and creativity.
“It is ferociously competitive out there … It is clear to me that in South Africa we have to make sure that the quality of education for poor kids is exceptional and enables them to play a meaningful role in our economy in order to improve our competitiveness,” he said.
Motsepe’s plea comes at a time when education standards in the public sector have hit a new low.
The World Economic Forum global IT report ranked South Africa’s education system 140th out of 144 countries, and placed maths and science capabilities as second-last in the world.
Motsepe, chairman of African Rainbow Minerals and Sanlam, said: “We need to put emphasis on value-added products. We all want to industrialise. This coun- try has no problem in funding bankable projects, and I’m confident that we will beneficiate.
“The key to improve our structural competitiveness is to create an environment — regulatory, legal, economic — that is conducive to private sector.”
The Sanlam conference focused largely on the challenges of investment managers in making returns for clients at a time when markets are so unpredictable.
Sanlam CEO Johan van Zyl asked the audience to always keep in mind their higher purpose as professionals.
“What is our purpose as investment professionals? Doctors can say they save lives and engineers can take credit for our roads and bridges. What can we tell our children when they ask us what we do?
“Our purpose is to be the custodians of the country’s savings and wealth, therefore, we have to be successful. If we’re successful, the country’s wealth can be maintained and grown.”
Research by Alexander Forbes showed that the biggest financial danger facing retirees was the drop in people’s savings, he said.
David Knee, head of fixed income at Prudential, said: “The economy is on a lower growth trajectory. The world that we’ve experienced during our careers has been an anomaly. Thus, investment returns will be harder to achieve in future.”
Investors had to find highreturn investments to compensate for the slower global economy and lower investment returns, Knee said.
However, investment professionals disagreed on how this could be done, with about half arguing for actively managed portfolios and the others saying index tracking was cheaper.
Chris Hamman, head of fixed interest at Sanlam Investment Management, said that in future, standardised portfolios known as index trackers would become more popular.
If not, he suggested investment professionals would have to look at even more exotic asset
Our purpose is to be the custodians of the country’s savings and wealth
classes to try to increase their returns for SA’s retirees and other investors.
One of these strategies was to invest in Africa.
“The continent is a viable investment. It will also help to improve diversification and enhance returns,” Hamman said.
He stressed that it remained important for individual employees to take an active interest in their long-term finances and to make any necessary adjustments to their budgets as soon as possible to ensure a financially viable retirement.