Efforts to accelerate the post-Covid-19 recovery in South Africa must be done sustainability and in an inclusive manner, speakers said during the Financial Services Working Group of the South African chapter of the Brazil, Russia, India, China and South Africa (Brics) Business Council’s webinar on May 6.
Development finance institution (DFI) the Industrial Development Corporation (IDC) of South Africa CEO TP Nchocho said as was the case with most DFIs and banks with the advent of the pandemic, it did not know what the future would hold and how things would unfold, and there was a natural adjustment to pull back and be extra cautious.
This proved prudent, as there were instances of devaluations in asset values, lost capital and businesses going bankrupt.
However, he noted that the IDC had seen significant recovery in its balance sheet, with assets recovered; funding partners globally opening lines of funding to it again; and its matured mainly listed assets also recovering.
Therefore, he said, the organisation’s funding capacity was much improved and was strong.
In deploying funding and aiming to engender recovery, Nchocho said the IDC, in line with its mandate, was prioritising the manufacturing and industrial sectors, as well as the localisation of manufacturing.
The organisation is also investing a lot of money in renewables and a robust pipeline of energy efficiency projects for distributed generation. The IDC was looking to further expand in this area.
Nchocho said the country had somewhat lost its momentum in terms of infrastructure rollout; however, he acclaimed that some impetus was returning, with the IDC having positive engagements with major State-owned entities with a focus on driving partnerships for development to get infrastructure implementation going.
He also noted a need to expand access infrastructure to less developed areas.
Meanwhile, nonprofit organisation Southern African Trust CEO Masego Madzwamuse commented that, when aiming for recovery, it must come from the perspective of who is driving it, who is benefiting and what kind of discussion was shaping priorities.
She noted that when countries reopened after lockdowns, the informal sector was largely forgotten, with provisions to resume economic activity skewed towards assisting big business.
She pointed out that in South Africa and the rest of the African continent, the structure of the economy was largely informal, with the most economic activity driven by women.
She noted that there were deficits in this informal structure in terms of incentives being put in place, infrastructure and policy support, which needed to be addressed.
Africa-based Fintech company Mukuru Group CEO Andy Jury highlighted the importance of digital financial inclusion, which the company had aimed to do by trying to bridge the cash to digital divide.
He emphasised that digitalisation was not a binary switch, but rather, a series of links in the value chain.
The company’s approach has been to find out what its customers’ pain and friction points were in their informal processes, and then walk alongside them with a solution that creates progress, rather than assuming what they may needed and advertising a solution.
With a large number of transaction happening in the informal sector, and customers also needing to send money across borders, it uses mobile and Web-based technologies to enable this efficiently and cost effectively.