According to Alex Van Den Heever, a consultant for healthcare finance and social reform, the “NHI is not itself the fix that is required for our healthcare system; instead, those in charge of health care need to adopt good governance and to be accountable for the healthcare services on offer”

Van Den Heever’s point of contention is that there are endemic problems within the health and educational sectors which are not suitably addressed through increased spending, but rather through measures enforcing accountability.

In order to effectively combat the shortcomings of the current health care system, one has to understand the problems which confront it. The NHI document, does not deliver a single proposition to deal with the aspects of zero accountability and lack of governance in the service delivery of national healthcare.

The ANC is proposing increased governmental expenditure from 3.5% of GDP to 8% of GDP. The estimate for expenditure for 2012 is R128 Billion. According to Van Den Heever, South Africa compares favorably with countries where the population has a similar GNI. (Gross National Income).

“In 2005, the South African government spent about US$340 per person on health care, which was more than the average of about US$300 spent per person that year by the 15 countries with a GNI per person above that of South Africa and the 15 countries with a per capita GNI below that of South Africa. (The GNI was measured in United States dollars adjusted to reflect the purchasing power parity of each country.)” (Personal Finance, 27 Nov. 2010, NHI ‘won’t cure’ the ills that plague our healthcare system,www.persfin.co.za, accessed: 01/12/2010)

According to Van Den Heever, the effectiveness of a countries health care system can be measured by maternal mortality rates. South Africa’s maternal mortality rates do not compare favourably with the countries mentioned above in the comparison regarding average spend per person. Therefore it can be reasonably assumed that something is amiss.

South Africa’s maternal mortality rate was estimated in 2005 to be 650 mothers in 100 000 live births and 410 per 100 000 in 2008. Comparing the 30 countries mentioned above, the maternal mortality rate was less than 100.

There are similar problems in the educational sector regarding governance and accountability. “South Africa is spending way more than its peers on education but with poor results: poor children in South Africa fare far worse when it comes to the level of education they achieve compared with that of poor children in other countries.” (Personal Finance, 27 Nov. 2010, NHI ‘won’t cure’ the ills that plague our healthcare system,www.persfin.co.za, accessed: 01/12/2010)

It seems that there are certain inconvenient truths confronting our national government that are being overlooked and stifled by increased spending which is ultimately covered by the citizens of South Africa.

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It seems that the administration of funds through the above-mentioned debt counselors has been where much of the National Credit Regulators difficulty has arisen. Dodgy or unethical debt-counselors have failed to pass on the debtor’s monthly repayments to their listed creditors resulting in legal action against the debtor.

According to the NCR, there are 7000 consumers applying for debt counseling every month and only 1870 registered debt counselors in South Africa. Further to his, 185 000 consumers have registered for debt counseling to date. For many an indebted consumer, the advent of the National Credit Act provided a means to consolidate debt and start afresh with a regularized sum payable every month and determined according to affordability. However this helping hand has been abused by many people acting unethically in their position as a registered debt counselor or being completely phony and disappearing with indebted consumer’s money.

Some of the obstacles that the NCR has encountered with crooked debt counselors are:
- Fees charged in excess of the recommended guidelines.
- Failure to process applications for debt review timeously.
- Not applying for the approval of debt restructuring plans to the magistrate, despite the fact that the clients had already started making repayments in accordance with said restructuring agreement.
- Failure to maintain adequate accounting records.

This abuse of power by the registered debt counselors has resulted in the NCR banning many practitioners and being forced to clamp down on dishonest debt counselors. There are prescribed processes and procedures as well as fees that need to be understood by the consumer in order to avoid any nasty surprises. It seems a shame that a process designed to lend a helping hand has become yet another tool for unscrupulous practitioners.

“You are considered to be over-indebted if your living expenses and your debt repayments exceed your income.”

If you are over-indebted, you can either approach your creditors or appoint a debt counsellor, who will check your income and expenses, and then draw up a repayment plan so that you can pay your creditors and meet your living expenses.

Once you agree to undergo debt counseling, this will be reflected on your credit record, and you will not be able to access further credit until your debt counsellor signs a clearance certificate that states that you have repaid all the debt for which you underwent debt counseling. 

One of the benefits of debt counseling is that your creditors are not allowed to take legal action against you while you are undergoing debt counseling. But this does not mean that you have a “payment holiday”. (Personal Finance, 2010, Clampdown on Dodgy Debt Counselors, www.persfin.co.za, accessed on 1 Dec. 2010)

Anyone under debt counseling should make sure that they are aware of the formalities which need to be followed in order for a valid debt restructuring agreement to be formulated as well as the fees which they can expect to be charged.

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An example provided by FNB- someone earning interest income of R5000 per month from a money market account 30 months ago is now only receiving R3 134. This amounts to a total loss of R1 866 per month, or an income drop of almost 40%. If you amplify these kind of facts to incorporate someone’s life savings and couple it with the statistic that only 1 in 10 people retire financially secure you will begin to understand that there are serious shortfalls in the financial security of our senior citizens.

The interest rates are the lowest that they have been in 10 years in order to create investment and opportunity, however the interests of our senior citizens have been overlooked in pursuit of this goal. The harsh reality is that pensioners are not able to find another source of income; they simply have to cut their standards of living even further. Meaning that roughly 9 out of 10 people are in various stages of financial distress throughout their retirement.

There are various measures that need to be taken and systems that need to be put in place in order to protect the aged and to cater for the changes in world economies. There should be a greater responsibility in the private sector in terms of making sure that retirement monies actually go to retirees as well as aggressive special benefits for pensioners. There are currently more people reliant on social grants than there are taxpayers in South Africa.

The last factor that should also not be forgotten is that of personal responsibility and education. Each person is personally responsible for their financial situation whether they are prepared for it or not. Retirees need to ensure that they receive adequate advice and act on it in a responsible manner.

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With banks still being wary of lending, it seems that corporates have begun to use their equity as currency said Naidoo’s colleague Anthony Wilter, the co-head of investment banking at Absa Capital.

In recent months, Absa Capital has completed a number of high-profile debt market transactions which saw it take top spot on the Bloomberg 2010 Underwriter Rankings League Table. This has been on the back of a number of large deals with companies such as BMW Financial Services, Barloworld Limited and Land Bank.

Wilter and Naidoo see Absa Capital benefitting strongly from an increased Parastatal spend in the next few years as well as the Banks knowledge of the rest of the continent. According to the dynamic pairing, the parastatal entities such as Eskom, SAA, SANRA and Transnet are expected to spend in the region of R846 bn in the next few years and much of this will be raised on the debt markets.

It seems that this movement will see spin offs for certain companies and mark a serious change in the debt markets as the Banks are no longer seen as the 1st choice in terms of raising capital.

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It seems that pessimism amongst the South African consumer has increased and when asked about the current economy, 41% revealed that they thought the country was still in recession. Their outlook on the future in terms of a recovery from this recessionary slump has also decreased with only 45% believing that the economy would improve in the New Year. Compared with 65% from the following year.

There has also been a drop in the shared feeling of job security with only 50% of South African’s considering their jobs to be safe. A vast drop when compared with the 80% job security in 2008. This insecurity is not surprising however, considering the continued unemployment in the 3rd quarter of 2010.

Many of the shoppers surveyed indicated that they were more likely to spend less, as well as the fact that their presents would be more practical.

However out of all the countries surveyed, it was revealed that Greek and Portuguese consumers had the bleakest outlook for the 2010 festive season.

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This index is widely regarded as the most accurate measure of employment in South Africa. The increased employment is widely regarded as a preparation for the upcoming festive season by retailers and wholesalers. Employment was ramped up in these sectors by almost 6%, this serves as indication that these sectors foresee the year-end shopping season to be better than last year.

In other sectors there has also been a positive growth trend, mining employment has risen by 7.72% reflecting the recovering commodity market and a slow turnaround in the South African economy.

In the past, one of South Africa’s key stumbling blocks has been jobless growth and with a perceived up-turn in the year end spending it seems that the unemployment rate has been temporarily addressed.

However Adcorp expects the adoption of automation technology to increase over the coming decade, leading to further drops in employment. This technological revolution will spark a change in the current labour market as we see it today.

Across the country it was noted that employment had risen in the Western Cape, Eastern Cape, Kwa-Zulu Natal and Gauteng Provinces , however the Northern Cape, Free State, North West, Mpumalanga and Limpopo had employment drops.

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This coupled with the recently strengthened Rand/Dollar exchange as well as the short term negative impact that the acquisition will have on Walmart’s return on assets indicates that this acquisition forms a core of Walmarts long-term growth strategy.

With the Rand/Dollar exchange at a perceived cyclical low point, one wonders why Walmart have not delayed the acquisition to cater for a strengthening dollar in the immediate future. However the flip side of this may be; according to a local political analyst, that Walmart perceives a further drop in the dollar’s hold on the Rand and wants to ensure it is able to seal the deal before said weakening takes place. This remains speculation and many say that by the time the deal has passed through all the regulatory measures the Dollar would have strengthened once more.

Whichever way you choose to look at it, the acquisition of Massmart has not been a bargain for Walmart. However with Walmart now having a footprint in the African market and access to 1 Billion African Consumers these initial acquisition speculations will become inconsequential.

All in all one cannot help but feel positive at the renewed interest in the African Market by international companies and the intellectual capital which they will inject into the South African retail sector will do much to strengthen the country’s retail market.

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According to the UIF’s Annual Report there has been a year-on-year increase of 173000 claims. Boas Seruwe, UIF Commissioner explained that claims had tapered between March and June, but had then shot up again in July. He said that this could partially be explained by the retrenchment of 27000 construction employees after the conclusion of the world cup.
The fund receives almost R900m in employer and employee contributions and yields R350m per month on its R48bn investments. The funds income from investments has increased by 3% from R3.34bn to R3.35bn in the last year.

As a result of the doubling of claims in the last financial year, the funds surplus has fallen from R9.08bn to R6.75bn.

These figures leave one questioning what kind of legacy the World Cup has left behind for the working class South African.
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Despite stocks beating returns on cash comfortably for the year to date-June, only 23% of the abovementioned R789bn collective was invested into Equity funds directly, according to the Association of Savings and Investments SA.

Investors are choosing the safety of bank accounts and fixed interest funds which are able to provide comfort amidst uncertain global markets. However many warn that this may be a dangerous game for investors on a whole but particularly older investors.

The common denominator is that investors overlook inflation and view stock market volatility as the biggest threat to their retirement capital. These fears may seem somewhat premature with inflation seemingly stable at the 6% mark for this year, however according to Schalk Louw of Contego Asset Management, 2011 will mark a serious change. Citing above-inflation salary increases, Eskom’s 25% electricity price hike and higher commodity prices as issues fueling the inflationary furness.

“In a world in which inflation could become the primary concern over the long run, one of the asset classes of choice will be cheapish equities; especially those that have pricing power and hence can grow profits ahead of inflation and pay attractive dividends”, said Shaun le Roux of Alphen Asset Mangement in a recent report.

It seems that investors with longer time frames should look at investing in the stock market which has for all its ups and downs not suffered a loss for any rolling five year period in the last century.

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As fewer clients canceled policies, Liberty Holdings turned to profit and contributed to the banks solid performance in a generally weak banking environment. A much needed contribution that has boosted results in comparison to the competition banks, Nedbank and ABSA.

CEO, Jacko Maree commented that Standard Bank remained committed to the long-term growth plan for its emerging markets franchise despite the uncertainty surrounding world markets. There is an expectation in 2010 that nearly half of the worlds Gross Domestic Product Growth will originate in the emerging markets, giving substance to Standard Banks Growth plan in areas such as; Brazil, Russia, India and China.

The groups headline earnings, surged 11% to R5.9 billion in the first 6 months to June and according to Sim Tshabalala ; “The positive results reflect the resilience of the bank’s infrastructure, where we are currently leveraging off previous investments in information technology, footprint and trained staff.”

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