Select Page

Blue economy is the next frontier for the African Renaissance

Blue economy is the next frontier for the African Renaissance

By Admire Ndhlovu of the Southern African Research Documentation Centre. – The recent global conference on the “blue economy” was a welcome development that provided an opportunity for Africa to unlock its potential and achieve sustainable development.

Meeting in Nairobi, Kenya from 26 to 28 November for the Blue Economy Conference, the global community discussed how to achieve the sustainable use and conservation of aquatic resources for improved human wellbeing, social equity and healthy ecosystems.

Blue economy is a term used to refer to the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem.

The largest sectors of the African aquatic and ocean-based economy are fisheries, aquaculture, tourism, transport, ports, coastal mining, and energy.

The African Union has now termed the blue economy as the “New Frontier of African Renaissance.”

Of the 54 countries in Africa, 38 are coastal, and more than 90% of imports and exports in the continent are conducted by sea, underscoring the importance of the blue economy in the development agenda of the continent.

Running under the theme “Blue Economy and the 2030 Agenda for Sustainable Development”, the Blue Economy Conference discussed new technologies and innovative ways of harnessing the full potential of oceans, seas, lakes and rivers in Africa as well as the challenges, potential opportunities, priorities and partnerships.

In her opening remarks, the Kenyan Cabinet Secretary for the Ministry of Foreign Affairs, Monica Juma said that oceans, seas, lakes and rivers hold natural capital that could be used to accelerate economic growth, while creating employment and reducing poverty.

To achieve this, governments, private sector and civil society made commitments to advance a sustainable blue economy in various fields including marine protection, plastics and waste management, fisheries development, financing, infrastructure, and biodiversity and climate change.

coordinate, harmonize and maximize the use of the sea and actions to combat marine waste.

The Namibian Blue Economy Strategy 2017-2022 addresses marine mining, tourism development, port infrastructure and services, and eradicate illegal, unreported and unregulated fishing, among other issues.

The country is keen to promote the blue value chain, incorporating fisheries and tourism sectors and is already moving towards desalinating seawater for agriculture, domestic and industrial use. Namibia is set to allocate US$5 million for marine protection and research.

The Southern African Development Community (SADC), one of the building blocks of the proposed African Economic Community, is already taking action to promote the development of its blue economy.

Nine SADC Member States are coastal and possess huge blue economy potential – Angola, the Union of Comoros, Madagascar, Mauritius, Mozambique, Namibia, Seychelles, South Africa and Tanzania.

Among the blue economy opportunities in the SADC region are the vast renewable resources such as tidal power, ocean currents and ocean thermal energy conversion, as well as food and nutrition security from fisheries and aquaculture.

Other opportunities for the region include marine and coastal tourism, shipping, mining and ecosystem services such as carbon sequestration, water filtration, atmospheric and temperature regulation, and protection from erosion and extreme weather events.

To fully exploit its blue economy, SADC is moving towards a strategy to develop a thriving maritime economy and harness the full potential of sea-based activities in an environmentally sustainable manner.

Various regional documents, including the SADC Revised Regional Indicative Strategic Development Plan (2015-2020) and the SADC Industrialization Strategy and Roadmap (2015-2063), identify the blue economy as a potential area for sustainable growth in the region.

The industrialization strategy, for example, requires that the blue economy initiative be mainstreamed in the development of infrastructure required to accelerate industrialization.

A number of SADC member states such as Mauritius, Namibia, Seychelles and South Africa have already developed blue economy strategies and institutional mechanisms at national level.

The blue economy initiative is thus timely for the SADC region, which has witnessed significant discoveries of large reserves of oil and natural gas in countries such as Mozambique, Namibia and Tanzania in recent years, indicating a huge potential for exploitation of the resource in the region.

In this regard, it is critical for SADC and the rest of the African continent to come up with an integrated blue economy strategy.

The blue economy concept has been debated in various fora. It featured prominently during the Rio+20 Summit held in Brazil in 2012, whose outcomes have proven to be a strong catalyst for driving new efforts for the implementation of previous and new commitments on oceans and inland waters.

At the African level, the blue economy is encapsulated in the AU’s 2050 Africa’s Integrated Maritime Strategy (AU 2050 AIMS), and is a core part of the AU’s Agenda 2063 where it is recognized as a catalyst for socioeconomic transformation.

In July 2015, the AU launched the African Day (25 July) and Decade of Seas and Oceans 2015–2025 to rally action on the Blue Economy.

The inaugural Blue Economy Conference in Nairobi gathered almost 19,000 participants from 184 countries, including seven Heads of State and Government and 84 Ministers.

A number of SADC leaders, including Presidents Filipe Jacinto Nyusi of Mozambique and Danny Faure of Seychelles, as well as Prime Minister Saara Kuugongelwa-Amadhila of Namibia attended.

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