Telling empowering stories, South Africans want to hear

Monday, 15 April 2024 20:14

South Africa lost R1 trillion in past decade says Trevor Manuel.

By Lehlohonolo Lehana.

Old Mutual chair Trevor Manuel says that foreign investors have disinvested more than R1 trillion over the past ten years, directing the funding into competing markets.

Writing in the financial services group's annual report, the former finance minister said authorities needed to put in place clear regulations and long-term regulatory certainty to attract and retain investment.

This has been driven by eroded confidence in South Africa amid various government-driven crises and investors looking for regulatory certainty and effective execution.

"Foreign investors disinvested more than a trillion rand from South African equities and bonds over the past decade… [with that money] being redirected to competing markets that appear to be on a more sound governance and regulatory footing," Manuel said.

This is coupled with the long-lasting effects of state capture and the continued impact of corruption in the country, which has led to both institutional weakening and subsequent distrust in the system.

"The effects of state capture continue to be felt in all spheres of South African society [and] while there has been an effort to restore the institutions and rebuild the economy, more work is necessary to eradicate corruption completely and regain institutional strength," said Manuel.

Old Mutual said it is willing to collaborate with regulatory authorities and the government to create an environment conducive to business growth and investment.

In its financial results for the year ended 31 December 2023 (FY2023), Old Mutual highlighted its profitable top-line growth and strong earnings delivered in 2023.

Old Mutual's gross flows improved by 3% to R32.81 billion; however, the company reported a negative net client cash flow of R11.97 billion (up 55% from the previous year).

The company said this increase was largely due to a shift from a major offshore investor, leading to R7.8 billion outflows.

This is coupled with increased withdrawals from money market funds driven by client liquidity needs in a tough economy, challenges in the South African pension fund market, and mandatory benefit payments.

Due to a strong performance, the Old Mutual executive earned a collective R157 million in 2023, with the CEO Iain Williamson a sizeable R32 million after a nice R13.2 million bonus.

According to Old Mutual's Remuneration Report 2023, Williamson saw his single-figure total remuneration increase by 46% from R22.07 million in 2022 to R32.32 million in 2023.

This comprised a total guaranteed pay (TGP) of R10.36 million, a short-term performance bonus (cash and differed into shares) of R13.21 million, and a vested interest (LTI) of R8.3 million – with R459,000 paid out in dividends from qualifying shares.

Notably, Prabashini Moodley, Managing Director of Old Mutual Corporates, saw her single-figure total remuneration increase by 45% from R9.70 million in FY22 to R14.1 million in FY23.

Additionally, Clarence Nethengwe, Managing Director of Mass and Foundation Cluster, recorded a 43% increase compared to last year, jumping from R11.25 million to R16.1 million in 2023

Many of the increases were linked to the vesting of the long-term incentives, which all of the executives were not awarded in 2023 because "the 2020 LTI award did not achieve any of the performance conditions and therefore has a nil vesting," the report said.

Meanwhile Manuel has joined the chorus of criticising former president Jacob Zuma, describing him as a "totally abusive" individual.

Over the weekend, former Public Protector Thuli Madonsela warned South Africa against voting for corrupt politicians in next month's polls, saying that if the likes of Zuma were brought back to public office they'd bring the country into total collapse.

The elections, scheduled for 29 May, are expected to be the most hotly contested polls since the dawn of democracy 30 years ago.