Sovereign wealth fund needs a hero:
A decade ago, the newly-formed Economic Freedom Fighters set out its intention to establish a sovereign wealth fund should the party ever come into power.
“This fund will also assist in the insulation of the South African economy whenever there are volatilities in resource-sector prices and when non-renewable resources are exhausted,” the EFF’s founding manifesto reads. “As we speak, despite massive resource riches, South Africa has no sovereign wealth fund, mainly because South Africans do not own their resources,”
Years later, when the world was teetering on a pandemic-induced economic disaster, the party’s ambition would be championed by an unlikely hero: President Cyril Ramaphosa, who announced his administration’s plan to establish a sovereign wealth fund in his State of the Nation address.
Then finance minister Tito Mboweni would later reveal that South African Sovereign Wealth Fund would have a target capital amount of R30 billion, about $ 2 billion at the time. “We must learn to save during the good times,” Mboweni said, “and a fund can play an important role as a counter-cyclical fiscal tool.”
A lot had changed between 2013 and 2020 — and there were many more shifts on the horizon. Notwithstanding the EFF’s expanded political influence, helped by the ANC’s fall from grace during the state capture years, South Africa’s economy had received its fair share of transformative blows.
For one, the 15-year commodity boom that had buoyed the country’s economy — and its public finances — had finally come to an end, shattering its growth prospects. The economy also suffered successive ratings downgrades, ultimately resulting in South Africa falling into junk status in 2017.
As a result, when Ramaphosa made his sovereign wealth fund intentions known, a development the EFF delighted in, commentators were sceptical. The country’s public finances were in trouble and the ANC government was struggling to restore its credibility in the aftermath of what the president deemed “nine wasted years”.
Little did we know that the pandemic’s economic onslaught was creating the conditions for another commodity boom, which — if used to its full potential — may have helped the ANC-led government avoid the hard fiscal trade-offs that now threaten its political relevance.
As early as the latter half of 2020, there were signs that a commodity windfall was on the horizon.
From April 2020 to June 2021, South Africa’s trade balance moved from a deficit of
R36.1 billion to a surplus of R57.7 billion — a swing of more than R90 billion. By the second quarter of 2021, the commodity boom had caused the country’s total tax revenue to improve by 56.2% during the course of a year and the rand appreciated by almost 30% over this period.
The commodity windfall came in handy when, in July 2021, social unrest tore through parts of the country, prompting the government to renew the R350 social relief of distress grant. At the time, Mboweni noted that the nearly R39 billion relief package could be rolled out without jeopardising the government’s fiscal ambitions, but cautioned against future profligacy.
“As such, our fiscal strategy remains on track. The implementation of these relief measures will not result in a change in the debt trajectory and the fiscal deficit will not exceed the level presented in the February budget,” the then finance minister said during a media briefing.
Commentators were already warning that the commodity boom was papering over the country’s economic problems.
Global conditions, namely the world economy’s recovery from the Covid-era downturn and constrained supply chains, had conspired to ratchet up commodity prices. Russia’s war on Ukraine extended this hot streak. But, when the commodity cycle proved to be short-lived — and as the South African economy’s frailties became more acute — it became clear that the country’s finances were in a far worse position than initially assumed.
A major problem was that the economy was failing to take full advantage of the commodity cycle, largely because of the ailing port and rail infrastructure under Transnet, state capture’s biggest target. Moreover, austerity’s escalation, in an environment of poor policy and slow reform implementation, meant government spending wasn’t going towards the investment desperately needed to grow the economy.
All this brings us to where we are today: the country’s growth prospects have deteriorated amid intensified load-shedding, as well as Transnet’s continued decline. Financing conditions have also worsened, with the rand continuing to be marked by weakness, even in the wake of high interest rates. Moreover, as the Public Economy Project noted in July, as the terms of trade gains look to be reversed, the cost of external financing for commodity producers will rise.
Meanwhile, trust in the government continues to flounder — a fact that stands to further delay potentially game-changing measures, such as the creation of a sovereign wealth fund.
According to a 2010 International Monetary Fund study, a sovereign wealth fund could have profound benefits for the economy, helping to — among other things — avoid the undesirable pressures on the exchange rate or inflation, create fiscal space (room for higher spending or lower taxes) or improve the sustainability of the public finances. The assets and liabilities of a sovereign wealth fund can also have a bearing “on the soundness of the balance sheet of the public sector and its solvency and debt sustainability”, the IMF study notes.
Importantly, a sovereign wealth fund would prove invaluable as South Africa makes the transition to a greener economy — a point made by the Alternative Information Development Centre, which has previously proposed using the Government Employee Pension Fund to capitalise such a fund. In helping to fund climate-resilient infrastructure, a sovereign wealth fund would help to avoid the economic pain inflicted by destructive weather events.
The idea of a sovereign wealth fund is, however, a difficult sell, particularly when the spectre of corruption continues to haunt the government’s every move. Ramaphosa’s presidency has failed dismally to assuage fears that the government simply cannot be trusted to manage public money, with members of his administration continuing to sidestep transparency and accountability.
That said, with more economic volatility still to come, a sovereign wealth fund deserves the right hero.
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UKZN Graduate School of Business and Leadership School teaches you how to reshape the business environment
In today’s rapidly evolving business landscape, staying competitive requires more than just a great product or service. It demands efficient, data-driven decision-making processes. This is where Management Information Systems (MIS) comes into play. Learning about MIS is not only beneficial but also essential for individuals and organisations that aim to thrive in the digital age.
Information systems are diminishing geographical barriers and fuelling intense global competition. Consequently, organisations are perpetually in pursuit of gaining a competitive edge, through obtaining operational excellence, innovating new products and services, forging novel business models, delivering exceptional customer service, enhancing decision-making capabilities, and more.
The swift advancements in information systems have made change an inevitable constant in today’s dynamic, digital business environment. A prime example of this is the transformative impact brought about by developments in handling Big Data, IOT, 5G, and the shift towards cloud, mobile computing and robotics. These factors are compelling companies to explore fresh avenues of conducting business, commanding the attention of executive teams as they navigate strategic directions and streamline processes to remain competitive in this evolving landscape.
The MIS module within the Postgraduate Diploma in Business Administration (PGDip – BA) offered by the UKZN Graduate School of Business and Leadership School (GSB&L) aims to educate students on the fundamentals of Management Information Systems and the profound technological trends reshaping the business landscape.
At the end of the module, students achieve the capabilities to oversee information resources from the viewpoint of a general manager, and have the ability to address issues in the implementation of information systems effectively. The students should also be able to handle business data throughout its lifecycle, starting from its origination in transaction processing systems, through its storage in data repositories (databases), to its utilisation in analytical tools.
Subsequently, individuals within different levels in an organisation should be able to conduct a critical examination of forthcoming electronic commerce and electronic business trends, and evaluate an information system comprehensively. Additionally, in this module the significance of information systems’ security, privacy, and ethical considerations is also discussed to ensure a holistic approach to MIS is achieved.
Management Information Systems provide a treasure trove of data that can significantly enhance the decision-making process. In gathering, processing, and presenting information in a structured and timely manner, MIS empowers managers and executives to make informed choices that lead to improved outcomes. Whether analysing sales trends, monitoring inventory levels, or assessing employee performance, MIS enables decision-makers to see the bigger picture.
Where efficiency is key to the success of any organisation, learning about MIS allows individuals to streamline business processes, automate routine tasks, and reduce manual labour. This increased efficiency not only saves time and resources but also leads to improved productivity. With MIS in place, employees can focus on more value-added activities, and the organisation as a whole can operate more smoothly.
Another important aspect of MIS is effective strategic planning, which is vital for long-term success. Management Information Systems provide valuable insights into market trends, customer behaviour and competitive intelligence. Organisations can adapt their strategies, seize new opportunities, and mitigate potential risks through having the ability to analyse online data by using the business intelligence systems.
Data accuracy and integrity are paramount in today’s data-driven world. A single error or inconsistency in data can lead to costly mistakes. The skills of the future need an understanding of data governance and quality control practices, ensuring that data used for decision-making is reliable and trustworthy. In a highly competitive business environment, gaining a competitive edge can make all the difference and ensure there is long-term survival, where organisations need to stay agile and innovative.
We are also in an era of increasing data privacy regulations and cyber threats, so understanding MIS is crucial for ensuring compliance and security. Professionals need to play a pivotal role in safeguarding sensitive information, implementing security protocols, and mitigating risks associated with data breaches. Therefore, organisations should stay ahead of evolving security threats.
Management Information Systems have become indispensable for organisations of all sizes and in all industries. Learning about MIS is not only important but also a strategic imperative. It empowers individuals to harness the power of data, make informed decisions, and drive organisational success. Those who invest in understanding and implementing MIS gain a competitive advantage, ensure data accuracy, and navigate the complexities of the modern business landscape with confidence. In a world where information is power, MIS is the key to unlocking new possibilities and achieving sustainable growth.
For more information, visit https://gsbl.ukzn.ac.za/
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TB talks: Will #UNGA78 change these three lives?:
In 2018, at the last high-level meeting on the fight against tuberculosis (TB) world leaders adopted aspirational goals to end TB by 2030.
Five years later, the talks at the United Nations General Assembly have been on again — in the shadow of much of the progress in reducing the burden of TB since then having been reversed because of the Covid-19 pandemic.
Despite at least some progress in tackling TB over this period, none of the targets set out in 2018 have been met — something the delegates at today’s discussion say is “deeply concerning” in a draft declaration.
In 2021, about 10.6-million people contracted TB and 1.6-million died. But TB is a preventable and curable disease — if it’s caught early. Worryingly, the number of cases of multidrug-resistant TB (MDR-TB) rose by 3.1% in 2021, which the declaration says poses “a critical challenge that could reverse the progress made against the disease”.
MDR/RR-TB, a type of TB for which standard treatment doesn’t work, often develops because people get onto treatment too late — be it because of unfair pricing or struggling to get tested.
In an unprecedented move, South Africa’s Competition Commission announced last week that it will investigate the American drugmaker Johnson & Johnson (J&J) for the high price it has been charging the country for bedaquiline, as well as for extending the tablets’ 20-year patent until 2027 to block cheaper generics from entering the country.
Bedaquiline is used to treat MDR-TB and is mostly used in combination with other medicines. It has to be taken for six months and is considered a game changer because it has replaced treatment — up to two years of long, painful injections with serious side effects (such as hearing loss) — with lower cure and higher death rates.
We’ve put together three people’s stories on how TB — and the struggle for access to medicines — has affected their lives. It’s accounts like these that underscore the importance of leaders being held accountable for following through on commitments made at high-level discussions such as today’s.
I survived the most deadly type of TB, but it cost me a lung
“One day in 2012 I started coughing up blood. It was a Monday.
“My doctor sent me to a public clinic where they took my sputum [sputum is another word for phlegm — the mucus that people cough up from the lungs]. I went back on the Friday and they told me I had multidrug-resistant tuberculosis. It meant that the usual TB treatment available then [a course of antibiotics for about six months] wouldn’t have worked for me.
“The doctors and nurses assumed I had had TB before and had stopped taking my medication, and that’s why I got this form of the disease. They blamed me for it.
“But I have never been on TB medicine before. I had contracted a drug-resistant bug from the start.
“About three days later, I went back to the clinic to start my treatment.
“When I saw the doctor, he had to go look at a flip chart behind the door [to see how to treat me].
“I was shocked that the chart seemed hidden away. It showed me that the health workers in that clinic didn’t really care to know more about the condition.
“It was as if they expected people with MDR-TB to die.
“I had to get an injection of kanamycin [an antibiotic] every day for nearly six months [along with four other drugs, which had to be taken for 18 more months].
“Towards the end of my treatment, the drugs stopped working. The doctors told me I now had extensively drug-resistant TB [also known as XDR-TB], a very serious variant of the disease that wouldn’t respond to even the most powerful TB medication clinics had at the time.
“They had no idea why this happened. For months I had responded well to the treatment, they said.
“The only option was to take a drug called linezolid. But it wasn’t widely available in the country at the time and you had to wait for about a month to get it.
“By the time I got my first dose of this medicine, the TB bacteria had already destroyed my one lung.
“Fearing that the disease would spread [to other parts of my body], the doctors removed my damaged lung.
“I was put on a new course of medicines, which included bedaquiline, delamanid and linezolid. Eventually, after four years of TB treatment, I was cured.
“I nearly collapsed when my doctor phoned me with the news, because I had started thinking that I’ll have to take up to 40 tablets every day — like I had done for most of my treatment period — for the rest of my life.
“I’m afraid of contracting the disease again. I would rather die than to go back on all that medication [even though treatment for MDR-TB is only nine months today].
“My journey with TB pushed me into activism. Many people still think that it’s only those with HIV who can get TB.
“But everyone is at risk. As long as you can breathe, you can get TB. As an activist, I believe that we need to change attitudes and educate people on the disease as a community.”
Although TB is curable, its consequences linger long after treatment for 20 to 30% of TB survivors; in poorer countries the number might be even higher. The tentacles of the disease reach beyond just the airways, though — scientists are researching how post-TB lung disease affects other body parts ( joints, muscles and the spine), mental health and patients’ quality of life.
I took on Big Pharma and won
“I remember getting sick in 2010, around the time of the soccer World Cup.
“I was a university student at the time. I did not have symptoms like coughing and sweating [which are typical signs of TB], but I was losing weight dramatically.
“At the campus clinic, the nurse could not find what was wrong with me, so she told me to go see a private doctor.
“The doctor could not find what was wrong with me either. He suggested I get tested for TB.
“The test results came back after three weeks. They were negative.
“I was eventually diagnosed with TB after the doctors did an X-ray of my chest. They found holes in my lungs. I started treatment [with a series of antibiotics] immediately.
“The medicines made no difference.
“The doctors tested me a second time and found that I had MDR-TB. They explained what it is [a type of TB for which the normal antibiotics don’t work]. I didn’t care. I just wanted to get better.
“The nurses told me I couldn’t go home because I could infect other people.
“I had to start a new treatment course with different antibiotics. After four months of taking these medicines, I woke up one morning and could not hear.
“One of the drugs [that was used to treat my form of TB], kanamycin, can cause deafness. No one had told me this before I started [taking the medicine]. My hearing loss was permanent.”
Kanamycin is given as an injection deep into a muscle, which is painful. The treatment for MDR-TB has since changed and a drug called bedaquiline is now used. Hearing loss is not linked to taking bedaquiline.
“At the time I lost my hearing, I had developed pre-extensively drug-resistant TB (pre-XDR-TB). [This is a forerunner to a form of TB in which very few of the drugs used to treat the disease will still work.]
“I was moved to [a special] ward. Doctors also found an abscess [a pocket full of pus] on my one lung. They cut it away in an operation, but it left me with broken ribs and a collapsed lung.
“After nine more months of treatment, the medication stopped working again. I now had full-blown XDR-TB. My doctors said I had a 20% chance of surviving.
“But there was [a new] drug they could try, they said. It was a medicine called linezolid.
“I had nothing to lose. I could choose between dying slowly without medication or taking a chance on the new drug.
“Nearly four years after I was first diagnosed with TB, I was cured of XDR-TB.”
Voices from civil society groups are important in the world’s TB fight. For example, in March, the Indian government rejected an application from J&J to extend their patent on bedaquiline. One of the things that helped the officials reach their decision was a petition Phumeza Tisile, who had extremely drug resistant (XDR-TB), filed along with Indian TB activist Nandita Venkatesan in 2019. Without the patent that allows J&J to be the only manufacturer, generic versions of bedaquiline can now be made by other pharmaceutical companies — which means the medication can sell for much cheaper.
I survived TB five years ago but the stigma still follows me around
“In 2010, my fiancé passed away from tuberculosis. His doctors told me to go to the clinic immediately if I had symptoms like his.
“So in 2012, when I started coughing and losing weight, I got tested. I was diagnosed with MDR-TB, a form of the disease for which one of the normal antibiotics, rifampin, does not work.
“I was admitted to the Fort Grey TB hospital [which has since been closed] for three months.
“When doctors tested me again [after this treatment], they found I had extensively drug-resistant TB (XDR-TB). [This is a form of TB in which very few of the drugs used to treat the disease will still work.] I only started recovering once I was given [a new type of drug called] linezolid.
“In 2015, I tested negative for TB. I was finally discharged.
“That same year, I moved to Cape Town. I felt fresh and healthy. I even gained weight.
“The feeling didn’t last long, though. A few months later, I started coughing up blood while on my lunch break at work.
“I was rushed to hospital, and a chest X-ray showed that I had an abscess [a pocket filled with pus] on my left lung. The abscess had been there for a long time.
“Again I was admitted. This time around I spent two years at Brooklyn Chest Hospital [in Cape Town]. The XDR-TB was back.
“Doctors told me they couldn’t operate on my lungs to remove the abscess [because my body was too weak for surgery]. So they taught me how to do postural drainage [lying or sitting in a series of positions while coughing to get fluid out of the lungs].
“I did this three times a day.
“I was cured of TB in 2018. But my lungs have been damaged and I still struggle to breathe.
“I’ve not had a steady job since my first diagnosis in 2012. Even though I was cured in 2018, I had to go for regular check-ups for two years afterwards.
“I had work for a time in 2020, but the stigma of TB still follows me.
“Employers are hesitant to hire me and they want written confirmation from my doctor that I’ve been cured.
“The state of my lungs also limits where I can work. For example, I can’t work in cold places, because my lungs won’t be able to cope.
“Two years after my last check-up, I’m still looking for work. My age is starting to worry me. I’m turning 36 this year — and the gap in my CV is getting longer.”
A 2022 study in South Africa found that TB makes poor people even poorer. Like Zine Konwayo, people diagnosed with TB often struggle to earn an income because they can no longer do physical work or have to go for lengthy treatment. The cost of being ill with TB equals, on average, 58% of a patient’s individual income, which includes spending money on transport to get to treatment centres and buying food.
But TB rarely affects just the individual. For households caring for a TB patient, the disease amounts to 39% of the home’s collective income. Even though treatment for TB is free in South Africa, buying nutritious food and struggling to get a disability grant make life harder for many TB patients who are already vulnerable.
This story was produced by the Bhekisisa Centre for Health Journalism. Sign up for the newsletter.
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