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The Africa we want – SADC summit in Windhoek to look at institutional reform

The Africa we want – SADC summit in Windhoek to look at institutional reform

Windhoek is the venue for next week’s 38th Southern African Development Community summit where delegates will critically look at the efficiency of the regional body, further strategies for regional integration, inclusive growth, and boosting socio-economic development especially for vulnerable or marginalised demographic strata.

The overarching theme for the two-day summit is the need for coordinated infrastructure and industrial development. The summit starts on Friday 17 August.

The theme builds on the previous four summits where industrial development systematically moved to the top of the regional development agenda. It also expands one of the key pillars of the SADC Regional Indicative Strategic Development Plan (RISDP 2015-2020), the need for integrated infrastructure networks as enabler of industrialization and market integration.

The summit will receive a progress report on the SADC Industrialisation Strategy and Roadmap for 2015 to 20163. The strategy’s three pillars are Enhancing Infrastructure, Strengthening Value Chains, and Corridor Development.

The SADC industrialization strategy, adopted in April 2015, seeks to achieve major economic and technological transformation at national and regional levels to accelerate economic growth through industrial development.

A Costed Action Plan for the Strategy covering 2015-2030 was approved in March 2017. The action plan details the key interventions for the strategy’s three pillars, defining the key enablers to unlock the region’s industrial potential.

The summit will also discuss progress on the implementation of the SADC Regional Infrastructure Development Master Plan (RIDMP) which is pivotal to the socio-economic growth of the region, including the industrialization agenda. The Master Plan provides for adequate regional infrastructure by 2027 at a projected cost of US$500 billion. It was approved in 2012.

The SADC Secretariat is currently reviewing progress of the first five-year phase 2012-2017 to add impetus to the implementation of regional infrastructure projects.

Cross-border infrastructure will cover six priority areas, energy, transport, tourism, water, information and communication technology and meteorology.

In the past, energy limitations became barriers to socio-economic development. Overcoming the energy deficit is seen as one of the main development priorities which must be overcome collectively. In 2017, for the first time in a decade, SADC generated surplus electricity.

Furthermore, the summit is expected to approve strategies for guaranteeing food security through investment in high-impact technologies that address chronic food and nutrition insecurity.

According to a report released in July, the State of Food and Nutrition Insecurity and Vulnerability in Southern Africa, the SADC region is estimated to have a cereal surplus of 6.3 million tonnes, down from 7.5 million tonnes the previous year. About 14% or roughly 29 million people are vulnerable in terms of food for the current year.

Youth empowerment is another developmental aspect that will receive much attention. As the timespan of the SADC Industrialization Strategy and Roadmap progresses towards 2063, the youth of today will reap the benefits of the key elements contained in the strategy.

Development needs peace and so another important issue for SADC leaders will be how to enhance peace and security as well as consolidate democracy and the rule of law. Although the region at large stable and peaceful, there are pockets of instability that continue to hinder peace and development.

The summit will discuss constitutional reforms in Lesotho, preparation for general elections in the Democratic Republic of the Congo, and the political situation in Madagascar.

The SADC Resource Mobilisation Framework (Alternative Sources of Funding for SADC Regional Programmes) is intended to determine how fiscal space can be created to enable SADC member states to finance regional programmes, projects and activities.

The six options for innovative sources of financing regional integration are the introduction of an export and import tax; a tourism levy; a financial transaction tax; a lottery system; philanthropy; and regional events. It is estimated that SADC can earn in excess of US$1.2 billion annually from these alternative sources to remove the current dependency on external funding

According to the SADC Secretariat, less than 10% of regional projects are funded by SADC member states. The lion’s share comes from international cooperation partners.

The SADC Secretariat was tasked to finalize the draft SADC Regional Resource Mobilisation Framework for submission to the Committee of Ministers of Finance and Investment, and ultimately to the SADC Summit of Heads of State and Government.

The summit will also receive a report from the human resources and administration committee, pertaining to review of the regional recruitment for the Secretariat. This was triggered by several challenges, including that of failing to fill positions because some member states had exhausted their allocated quota points.

Reviewing the application of the quota system is intended to ensure that the SADC Secretariat has access to high quality human resources from member states in a fair, effective and objective manner, while observing the principle of equity and representation without compromising delivery.

The summit is expected to present a common position on the African Union (AU) Institutional Reform, in line with an AU Assembly decision in January this year to consult the eight Regional Economic Communities that make up the AU on the need to review the institutional structure.

The SADC Secretariat has prepared an analytical paper that was reviewed by the SADC Council of Ministers in March and is expected to be submitted to the summit for approval.

Key issues proposed by SADC for AU institutional reform include; African leaders to be given sufficient time to consult nationally on strategic issues; An urgent and thorough study of the bureaucratic barriers that affect service delivery in the AU Commission and other organs and institutions; and Reducing AU summits from two to one per year.

* Southern African News Features are produced by the Southern African Research and Documentation Centre (SARDC), which has monitored regional developments since 1985. Website and Virtual Library for Southern Africa at


About The Author

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