“COVID 19 did not browbeat us into submission or disillusionment.
Working together, we overcame that crisis, and we have started to recover. Today our economy is larger than it was before the pandemic”
President Cyril Ramaphosa
When considering the impact of global and local economies on everyday life, the easiest perspective is the pessimistic. But despite the war in Ukraine, and other geopolitical conflicts, as well as the world’s recovery process from the COVID-19 pandemic, indicators both abroad and at home support the idea that the South African economy is on it’s way up. From the perspective of Profmed, this is naturally positive news; whose member base of skilled professionals will become key drivers in positive change for South Africa. With a more stable financial landscape globally, but also the economic reform the incumbent government is driving towards, each economic issue — while admittedly grave — has the potential to be used powerfully for the Profmed business and its members.
The global and local economic outlook
It was a sobering moment for South Africa when both international financial ratings agencies S&P as well as Fitch rated South Africa’s investment status as “junk” (Fitch; S&P). But much has changed since then; including one of the most proactive COVID-19 responses globally, which buttressed the country from the full potential devastation of the pandemic. While many European countries, Australia and parts of the United States suffered multiple waves of health and financial hits; South Africa; in retrospect; seems to have weathered and perhaps even conquered the storm.
And a storm is exactly what characterises the financial landscape globally and locally — turbulent, dynamic and unpredictable. In late 2022, President Joe Biden, as well as the World Bank and other bodies pronounced that 2023 would be the year of a great recession. However, even in a few short months (likely due to the availability of up to date global economic figures), the tide has turned. The International Monetary Fund (IMF)’s World Economic Outlook Report has indicated clearly that the likelihood of a recession is lower than first argued by the abovementioned bodies. Moreover; there’s evidence to suggest that South Africa in particular is headed for an upswing, rather than a downturn, despite the current status quo. According to the African Development Bank, South Africa’s economic growth is well above global averages in many key areas. As per their Country Report on South Africa, the crux of our potential lies in these victories:
“Inflation was estimated to decline to 3.4% in 2020, within the reserve bank target of 3%–6%. The budget deficit was estimated to widen significantly to more than 14% of GDP, mainly due to spending pressures to contain the economic impact of the pandemic. The country will, however, record its first current account surplus in 2020, estimated at about 1% of GDP, because of the high price of the gold it exports, a low bill for fuel imports, and increased agricultural exports. Despite the pandemic, the South African banking sector remains sound, with a capital ratio of 16.3%, which is above the 10% regulatory requirement” (ADP).
According to President Cyril Ramaphosa, these figures have to have tangible value to everyday South Africans; and the incumbent government is committed to making the economic futures of citizens far better than before. While this is naturally good news for a broad base of citizens; it also means that in the context of the growing Profmed business; a more professional-friendly environment is being created. Ideally the emerging strategies would have to address the current concerns (and even emigration reasons), which include: more competitive salaries, quick job uptake after University and a key problem: the ability for professionals to invest in marketable assets like homes and businesses (Adebayo). In his State of the Nation (SONA) address on February 9 2023, President Ramaphosa asserted that a robust employment landscape is imminent, in light of the post-pandemic economic growth and the approximately 1.5 million jobs created between the third quarters of 2021 and 2022.
The President noted too that the biggest barrier to business and professional work is the current electricity crisis (South African Office of the Presidency); which has made the lives of those working in offices, homes, virtually and even nomadically because of sporadic access to power, the internet and technologies crucial to the functioning of the South African economy. As such, the urgent interventions like the initial State of Disaster response with regards to Eskom and the long-term Just Energy Transition Investment Plan (which will invest R1.5 trillion our economy in renewable energy sources), what has been the single biggest threat to our economy may come to represent an historic turning point for the future of the economy, the workplace and its professionals.
There is no doubt that current geopolitical conflicts, resource constraints and systemic economic issues may continue to plague the global and local economic outlook, but while skeptics originally argued that we were headed toward a collision course, South Africa’s path could be one of crucial course correction, which allows for the full potential of the economy to be realised. For Profmed and its members, this stability, potential for further growth internally and support for future professionals means that the business’ future, so closely tied to that of the nation’s, is an optimistic one.
Proactively addressing the inequality issue
South Africa is positioned uniquely in the global economic landscape. On one hand, it represents a stronghold position in key political and economic bodies like BRICS, SADC, the AU and even the UN; due to South Africa’s strong legacy of diplomacy and economic strength in the Global South (Maldonado-Torres). On the other hand, it struggles to shake off the historical economic fissures which continue to plague the nation — most notably through the disparities in the lifeworlds of everyday citizens. South Africa currently holds the highest Gini co-efficient [0.67 per capita} in the world and is described by local researchers as a ‘ticking time bomb’ (Africa Check; University of Cape Town). But while inequality persists in developing nations and South Africa specifically, the appropriate response from the public and private sector (including Profmed) is to meet it head on and carve out potential solutions. According to FIT Consulting, South Africa has one of the highest rates of urbanisation (growing to 90% by 2025) — a key factor in developing a stable, high-level workforce. Urbanisation stimulates more work, more opportunity and more environments in which high-skilled professionals can thrive.
While South Africa’s inequity issue is based on historical intersections of race and gender, location and proximity to centres of business are also a key factor (Crenshaw). As such, urbanisation presents a potential removal of longstanding divided economies; and key services like those which Profmed offer can be an important part of developing and sustaining the lives of the new wave of professionals. Conversely, more professionals, particularly in emerging industries represent the potential for a significantly increased member base — and a member base which, by virtue of their ability to afford the service, and willingness to stay in South Africa for work, both represent opportunities for growth. A more equal society is of course, inherently good for South Africa, but it also means Profmed can be of service more equally as well.
However, moving those in peri-urban and rural spaces into big cities is not a silver bullet. Addressing the inequality issue also means ensuring that the standard of living in the urban context is optimal, or at the very least, fully functional. And once again, while media and discursive perspectives on our current status quo suggest a totally undesirable picture, there are inroads being made. In the health sector, strong subsidisation of treatment for diseases like HIV and tuberculosis means that medicines are more affordably available, significantly more so than in more developed like the United States; where healthcare is patently unaffordable (Department of Health, Republic of South Africa). And while at first read that might seem counterintuitive from the perspective of a health insurance provider, a stronger urban base of professionals whose ‘basics’ are covered by the state does not remove the need for a scheme like Profmed, it simply means there is significantly more value to the new member. Outside the health sector, consistent new stimulus for the ‘missing middle’ (Mail&Guardian) of potential new graduates (later professionals) via NSFAS, the NRF as well as private sector bodies means once again, a new member base propelled by efforts towards reducing economic inequity.
Staying front of mind amidst rising living costs
While it is clear that efforts are being made locally towards economic stimuli and a stronger, more competitive economy; individuals across the globe are constantly looking to find ways to stretch their paycheques amidst rising living costs. Whether it’s a European-waged war, conflict in the Middle East, disagreements at international conventions or even something seemingly innocuous like a celebrity’s throwaway comment; our relationship to resources and their costs is for the most part, reasonably unpredictable. As such, it is difficult for anyone to fully anticipate whether their income will match an overnight fuel hike or yearly member increase. And despite Profmed being focused on professionals specifically, there is no certainty of affordability with some of the world’s largest companies — most notably Google and Twitter — retrenching staff in droves.
And unfortunately, in keeping with the classic logic of Maslow’ Hierarchy (Maslow), the ‘things we can do without’ are the first to go. Unfortunately, for many, even those in developed countries, health insurance falls onto this list (WHO World Systems Regional Report). According to the report, if a health insurance scheme is deemed unsustainable amidst change (less money to spend; gaps in employment; sudden need for high cover unaccommodated for), individuals will gamble with whichever public sector or social security health system is in place.
This report emerges primarily from European data, where public health systems are far more functional and the average pay for professional individuals is significantly higher. As such, the ‘first to go’ logic may apply even more severely in the South African context, where, although the public health system (in its current iteration) is not necessarily appealing, a health insurance scheme which cannot bear change in its members’ financial status is not appealing either, especially for individuals operating with less money and more priorities. In his plans for 2023 and beyond, President Ramaphosa asserted that the government is keenly aware of the pressure on South African pockets, and that while the current state support strategies will remain in place, the much discussed Basic Income Grant is under discussion. There are also plans to introduce (alongside NSFAS), a Comprehensive Student Funding Model which would remove the burden of the high costs of tertiary education from more parents (South African Office of the Presidency). Both these, and other planned initiatives are attempts to respond to global and local pressures.
For Profmed, attempts to relieve pressure around where professionals spend money is key to a sustainable member base and prevents a scenario where health insurance has to fall into the dreaded ‘first to go’ category, owing to the fact that more needs are being accommodated for by the state; and more future professionals are able to consider health insurance and indeed Profmed’s offerings, as affordable. That said, the state cannot do all the heavy lifting; and Profmed must remain front of mind. Continuing to make clear that Profmed is on the side of its consumer, continuing to draw attention to alternative options when circumstances change, and consistent thought leadership in this area makes the business an ally to its members in the face of changing financial status.
Responding to new forms of the economy
One of the elements of the economy which is evolving significantly is the digital economy. Whether that’s new forms of currency and banking; artificial intelligence and extended reality technologies or new careers which have emerged from the ‘Fourth Industrial Revolution’. The Future of Work 2050 Report (The Millennium Project) asserts that by the year 2040, the majority of jobs will be performed either entirely digitally, as a ‘blended approach’ of digital and physical, and in some industries, performed fully through machine learning. As such, the notion of the ‘professional’ and the ‘economy’ will shift and change. For Profmed, this is not new ground, as many of its members already operate in year 2050 environments, and their insights and lifeworlds could inform what the future offering could be.
And while skills divisions in the Global North and South mean that it is unlikely that South Africa will lead the move to fully digitised economies (Dalvit), the country ranks highly in areas like mobile technology and digitised banking; with the emergence of technologies like contactless payments, seamless international banking and even Bitcoin ATM machines in local shopping malls, the country won’t be at the end of the queue either. As such, it will be important to understand where the opportunities lie within future economies; lest the Profmed offering be too rigid to meet the needs of the future professional landscape. Conversely however, the skills level required for the future economy will necessarily mean more professionals, needing more support to meet the growing demands of an increasingly complex, arduous but likely lucrative employment environment.
Statistics vs sentiment: An optimist’s approach
In contrasting the economic status quo and future; to the way it is discussed, much of the fear around South Africa’s future emanates from political fatigue (or even apathy), a sense of frustration with government, and fear mongering headlines. In the Future of Work 2050 Report, it is argued that the economy and the workplace are too often considered through the lens of “hasty answers” rather than “open questions”. This is not at all unique to South Africa, and even developed nations such as the United States and France (Wall Street Journal) are steeped in one-sided sentiment; derived from poor sources or even active misinformation. The reality is that bar the so-called Roaring 20s or South Africa’s first post-apartheid years, discussions about the economy tend to range from cautious to outright frightening. As such, in light of what is not a nightmare-like future, it will be important for Profmed to continue to share accurate, multidimensional information with its members and stakeholders.
Similarly, it must position statistics over sentimental responses in order for the member to feel safe — and as though Profmed is a business which will:
– Consistently support its current and future members through economic changes
– Communicate the impact of macro factors on membership in clear, transparent ways
– Continue to be proudly South African in its approach
– Continue to court new (young) members who may be lifetime members
– Lean on the optimism of fact rather than the shock factor of conjecture or fake news
– Remain agile amidst an uncertain (but not unpleasant) future
