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SADC Zambezi Environment Outlook 2015

Information provided by Southern African News Features

The Zambezi Environment Outlook 2015 was launched at the 7th SADC Multi-Stakeholder Water Dialogue held recently in Windhoek.

Under the broad theme “Towards strengthening basin-wide cooperation and regional integration”, the Outlook highlights the state and trends of key environmental resources, including land, freshwater, marine and coastal resources, forests and woodlands, and wildlife of a single ecosystem of the Zambezi Basin.

Namibia shares about 180 km river frontage on the Zambezi in the Caprivi Zipfel squeezed between Zambia, Zimbabwe and Botswana. The Zambezi River enters Namibian territory at a town called Wenela and exits at a point in the middle of the river, about one kilometre downstream from Mpalila Island.

The Environment Outlook shows that significant changes have occurred during the past 15 year since a comprehensive assessment of the basin was last published in 2000.

Among other changes, the Outlook notes that the basin is characterised by declining water quality, depletion of groundwater and a surge in invasive aquatic species. It notes changes in rainfall patterns expecting a decrease of 10% to 15% in rainfall by 2050.

Land and agriculture challenges noted in the Outlook include declining per capita land availability as a result of growing population, soil erosion and fertility decline, land degradation and soil salinization, as well as outbreaks of new strains of diseases. The Outlook also details issues and challenges in the other sectors such as tourism, energy and industrialisation.

Other notable changes include the expansion of urban areas, depletion of wetlands, reduction of forest cover and loss of key species.

Most of these changes are attributed to unsustainable human activities.

The report takes a retrospective and forward-looking analysis of issues, covering cross-sectoral elements relating to human settlements, energy and atmospheric dynamics. It, therefore, brings these changes into focus, presenting policy options for addressing them.

The Zambezi Environment Outlook 2015, produced by the Southern African Research and Documentation Centre (SARDC) through its I. Musokotwane Environment Resource Centre for Southern Africa (IMERCSA) for the Zambezi Watercourse Commission (ZAMCOM), is an update of the State of the Environment Zambezi Basin 2000 report.

The Outlook is seen as an important milestone for socio-economic development in the basin and the rest of southern Africa as it provides a monitoring tool for basin-wide and regional agreements, protocols and targets, which include the ZAMCOM Agreement, the Revised SADC Regional Indicative Strategic Development Plan (RISDP), the third Regional Strategic Action Plan for Integrated Water Resources Development and Management (RSAP III), the Revised SADC Protocol on Shared Watercourses, and the Protocol on Environmental Management for Sustainable Development.

The Revised RISDP, in particular, calls for regular environmental assessment, monitoring and reporting for the purpose of analysing regional trends.

The report will strengthen collaboration between policymakers and the public in a collective effort to effectively manage basin’s shared resources. The production of the Zambezi Environment Outlook is a long-term process, which is expected to continue in the future.

Production of the Outlook was made possible with support from cooperating partners led by the Government of Germany in delegated cooperation with the Governments of the UK (UKAid) and Australia (AusAid) managed by the German International Cooperation Agency (GIZ).

The Southern African Research and Documentation Centre is an independent regional knowledge resource centre which seeks to undertake research that informs development. Established in 1985 in Harare and Maputo, SARDC has a strong track record of experience and expertise in research, collecting, analysing, writing, documenting and disseminating knowledge from a regional perspective in a way that is accessible for different target audiences. SARDC has a 10-member regional Board chaired by Prof. Peter Katjavivi, MP, from Namibia, and the Vice Chair is Arlindo Lopes from Mozambique.

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Sanlam 2018 Annual Results

7 March 2019

 

Sanlam’s 2018 annual results provides testimony to its resilience amid challenging operating conditions and negative investment markets

Sanlam today announced its operational results for the 12 months ended 31 December 2018. The Group made significant progress in strategic execution during 2018. This included the acquisition of the remaining 53% stake in SAHAM Finances, the largest transaction concluded in the Group’s 100-year history, and the approval by Sanlam shareholders of a package of Broad-based Black Economic Empowerment (B-BBEE) transactions that will position the Group well for accelerated growth in its South African home market.

Operational results for 2018 included 14% growth in the value of new life insurance business (VNB) on a consistent economic basis and more than R2 billion in positive experience variances, testimony to Sanlam’s resilience in difficult times.

The Group relies on its federal operating model and diversified profile in dealing with the challenging operating environment, negative investment markets and volatile currencies. Management continues to focus on growing existing operations and extracting value from recent corporate transactions to drive enhanced future growth.

The negative investment market returns and higher interest rates in a number of markets where the Group operates had a negative impact on growth in operating earnings and some other key performance indicators. This was aggravated by weak economic growth in South Africa and Namibia and internal currency devaluations in Angola, Nigeria and Zimbabwe.

Substantial growth in Santam’s operating earnings (net result from financial services) and satisfactory growth by Sanlam Emerging Markets (SEM) and Sanlam Corporate offset softer contributions from Sanlam Personal Finance (SPF) and Sanlam Investment Group (SIG).

Key features of the 2018 annual results include:

Net result from financial services increased by 4% compared to the same period in 2017;

Net value of new covered business up 8% to R2 billion (up 14% on a consistent economic basis);

Net fund inflows of R42 billion compared to R37 billion in 2017;

Adjusted Return on Group Equity Value per share of 19.4% exceeded the target of 13.0%; and

Dividend per share of 312 cents, up 8%.

Sanlam Group Chief Executive Officer, Mr Ian Kirk said: “We are satisfied with our performance in a challenging operating environment. We will continue to focus on managing operations prudently and diligently executing on our strategy to deliver sustainable value to all our stakeholders. The integration of SAHAM Finances is progressing well. In addition, Sanlam shareholders approved the package of B-BBEE transactions, including an equity raising, at the extraordinary general meeting held on 12 December 2018. Our plan to implement these transactions this year remains on track.”

Sanlam Personal Finance (SPF) net result from financial services declined by 5%, largely due to the impact of new growth initiatives and dampened market conditions. Excluding the new initiatives, SPF’s contribution was 1% down on 2017 due to the major impact that the weak equity market performance in South Africa had on fund-based fee income.

SPF’s new business sales increased by 4%, an overall satisfactory result under challenging conditions. Sanlam Sky’s new business increased by an exceptional 71%. Strong growth of 13% in the traditional individual life channel was augmented by the Capitec Bank credit life new business recognised in the first half of 2018, and strong demand for the new Capitec Bank funeral product. The Recurring premium and Strategic Business Development business units also achieved strong growth of 20%, supported by the acquisition of BrightRock in 2017. Glacier new business grew marginally by 1%. Primary sales onto the Linked Investment Service Provider (LISP) platform improved by 5%, an acceptable result given the pressure on investor confidence in the mass affluent market. This was however, offset by lower sales of wrap funds and traditional life products.

The strong growth in new business volumes at Sanlam Sky had a major positive effect on SPF’s VNB growth, which increased by 7% (14% on a comparable basis).

Sanlam Emerging Markets (SEM) grew its net result from financial services by 14%. Excluding the impact of corporate activity, earnings were marginally up on 2017 (up 8% excluding the increased new business strain).

New business volumes at SEM increased by 20%. Namibia performed well, increasing new business volumes by 22% despite weak economic conditions. Both life and investment new business grew strongly. Botswana underperformed with the main detractor from new business growth being the investment line of business, which declined by 24%. This line of business is historically more volatile in nature.

The new business growth in the Rest of Africa portfolio was 68% largely due to corporate activity relating to SAHAM Finances, with the East Africa portfolio underperforming.

The Indian insurance businesses continued to perform well, achieving double-digit growth in both life and general insurance in local currency. The Malaysian businesses are finding some traction after a period of underperformance, increasing their overall new business contribution by 3%. New business production is not yet meeting expectations, but the mix of business improved at both businesses.

SEM’s VNB declined by 3% (up 6% on a consistent economic basis and excluding corporate activity). The relatively low growth on a comparable basis is largely attributable to the new business underperformance in East Africa.

Sanlam Investment Group’s (SIG) overall net result from financial services declined by 6%, attributable to lower performance fees at the third party asset manager in South Africa, administration costs incurred for system upgrades in the wealth management business and lower earnings from equity-backed financing transactions at Sanlam Specialised Finance. The other businesses did well to grow earnings, despite the pressure on funds under management due to lower investment markets.

New business volumes declined by 13% mainly due to market volatility and low investor confidence in South Africa. Institutional new inflows remained weak for the full year, while retail inflows also slowed down significantly after a more positive start to the year. The international businesses, UK, attracted strong new inflows (up 57%).

Sanlam Corporate’s net result from financial services increased by 4%, with the muted growth caused by a continuation of high group risk claims experience. Mortality and disability claims experience weakened further in the second half of the year, which is likely to require more rerating of premiums in 2019. The administration units turned profitable in 2018, a major achievement. The healthcare businesses reported satisfactory double-digit growth in earnings, while the Absa Consultants and Actuaries business made a pleasing contribution of R39 million.

New business volumes in life insurance more than doubled, reflecting an exceptional performance. Single premiums grew by 109%, while recurring premiums increased by a particularly satisfactory 56%.

The good growth in recurring and single premium business, combined with modelling improvements, supported a 64% (71% on a comparable economic basis) increase in the cluster’s VNB contribution.

Following a year of major catastrophe events in 2017, Santam experienced a relatively benign claims environment in 2018. Combined with acceptable growth in net earned premiums, it contributed to a 37% increase in gross result from financial services (41% after tax and non-controlling interest). The conventional insurance book achieved an underwriting margin of 9% in 2018 (6% in 2017).

As at 31 December 2018, discretionary capital amounted to a negative R3.7 billion before allowance for the planned B-BBEE share issuance. A number of capital management actions during 2018 affected the balance of available discretionary capital, including the US$1 billion (R13 billion) SAHAM Finances transaction. Cash proceeds from the B-BBEE share issuance will restore the discretionary capital portfolio to between R1 billion and R1.5 billion depending on the final issue price within the R74 to R86 price range approved by shareholders.

Looking forward, the Group said economic growth in South Africa would likely remain weak in the short to medium term future, and would continue to impact efforts to accelerate organic growth. The outlook for economic growth in other regions where the Group operates is more promising. Recent acquisitions such as the SAHAM transaction should also support operational performance going forward.

“We remain focused on executing our strategy. We are confident that we have the calibre of management and staff to prudently navigate the anticipated challenges going forward,” Mr Kirk concluded.

Details of the results for the 12 months ended 31 December 2018 are available at www.sanlam.com.