Put race aside and have a conversation about the future of SA, Ninety One CEO says

The time has come for South Africans to put racial divides aside and debate the future of the country ahead of 2024’s hotly contested general elections, the CEO of SA’s biggest asset manager Ninety One says.

Hendrik du Toit believes that it will be important to find common ground as South Africans.

“It’s important that South Africans have a debate about their future. That is what elections are about. We must start holding whoever governs us accountable and maybe [we’ll] get over the old racial boundaries or old ideological boundaries, and just sit and talk as South Africans about what is needed to create a living for ourselves,” Du Toit told Business Day after the release of the group’s interim results on Wednesday.

“If we get that done, next year will be a win. And may I tell you the year, in 1991, when we started this business everyone was so bearish and depressed about the country. They thought [Nelson] Mandela would take everything. Ninety One was actually built because we were positive in the midst of deep depression about the future of the country.”

Many pundits expect SA to have a coalition government at a national level after 2024’s elections. Key provinces such as Gauteng and KwaZulu-Natal are too close to call.

Du Toit said what matters is holding whichever party that emerges as the government accountable.

“We could be nearing a turning point if we have either political realignment or a strong message to whoever leads us that they cannot lead us in the way they have been doing up to now. Even a marginal improvement will be a massive improvement.”

Fani Titi, CEO of Investec, from which Ninety One was spun off a few years ago, ruffled a few feathers in the governing party at the Gordon Institute of Business Science two weeks ago, saying that SA does not have a “half-decent government”.

Greylist

Du Toit said the government should focus its energies to getting the country off the greylist, improve the public and grow the economy instead of pursuing an “ambitious” policy agenda, which include National Health Insurance (NHI).

Du Toit, who also founded the company, formally called Investec Asset Management, said the government needs to stop trying to do too many things at the same time and prioritise.

“In SA my request will be to focus on getting off the greylist and do the simple things right. This constant tinkering, from pension pots to NHI, ends up in confusion and is not productive. It also doesn’t help the average citizen through this stressful time,” Du Toit said.

“I would like us as a country to focus on what is really important and use the bandwidth available in the Treasury and civil service to deliver for people and not pursue an excessively ambitious policy agenda.”

Finance minister Enoch Godongwana in the medium-term budget policy statement tabled in November said that the government expects to address all the deficiencies identified by the Financial Action Task Force (FATF) by early 2025.

Since the greylisting, government departments and agencies — including the police, the Hawks, National Prosecuting Authority, Special Investigating Unit, State Security Agency, the Reserve Bank, Financial Sector Conduct Authority and SA Revenue Service — have been working to address deficiencies flagged by the FATF, he said.

Godongwana said that the country has addressed 15 of the 20 technical deficiencies in the legal framework, and is making good progress on 17 of the 22 effectiveness action items.

The state of the economy is important for Ninety One, which still derives a significant chunk of its business in its home market.

The group bled £4.3bn in assets under management in the six months ended September, taking its overall assets under custody to £123.1bn, as its UK business came under pressure.

Du Toit said they have held up well in the SA market, but was worried about long-term prospects if the economy does not start creating jobs and wealth.

“SA is not producing jobs and wealth at the moment. And this is a very important market for us. As an example, if we measure ourselves in rand, from the last reporting period we have about R2.8-trillion assets under management. Of that, SA accounts for about 40%,” he said.

“We want South Africans to save more money with us and if we don’t create jobs and grow the economy, they will have to use that money to live. And this will be bad for our business and every other asset manager in SA. For us it’s a longer term concern that the SA economy is not generating jobs and wealth. In the short term, it has not really hurt us unlike industrial or retail companies who feel the pressure immediately.”

khumalok@businesslive.co.za