Economy turning the corner, says upbeat Gore
Gore joined other captains of industry such as African Rainbow Minerals boss Patrice Motsepe and Investec’s Stephen Koseff, who said the country was well on its way to recovery following years of corruption and uncertainty under former president Jacob Zuma’s administration.
Gore told the star-studded Discovery Leadership Summit in Sandton, Joburg, that the multibillion-rand investment demonstrated the company’s confidence in the economy.
He said the money would be directed towards Discovery Bank and other business ventures.
“I’m very proud about our evolution as Discovery but we, frankly, built this company on the back of a very receptive South African market,” Gore said.
“If you look at Africa’s biggest economy, Nigeria, and you add all their banks together, they are smaller than Standard Bank and FirstRand I am making a point that we don’t appreciate the size of the South African market.”
Gore said the lion’s share of the R13bn investment would be ploughed into the South African economy.
He said Discovery Bank, which was announced a few years ago, would add to the group’s current market capitalisation of more than R100bn.
Motsepe echoed Gore’s upbeat sentiment, saying businesses were seeing more opportunities in the domestic economy.
“We dare not have a false sense of optimism,” he said. “But we have shareholders all over the world and we continue to see South Africa as an excellent place to do business and to invest in.”
Motsepe, who is regarded as the country’s richest black person, scored big in Sanlam’s R8bn black empowerment deal this week through his investment vehicle, Ubuntu Botho.
Koseff, who recently stepped down as the mainstay chief executive of Investec, described the past eight years as “useless” for growth.
He shared the frantic behind-the-scenes lobbying for Zuma to reverse his ill-fated appointment of Des van Rooyen as finance minister in 2015.
Koseff said he believed current President Cyril Ramaphosa had a big role in Van Rooyen’s short stay.
“I don’t know how he (Ramaphosa) did it, but I think he had a big role in Van Rooyen’s removal,” Koseff said.
“In the last eight years, gross domestic product (GDP) per capita was flat.
“Inclusive growth is the key to uplift society because we live in society and not off it.”
The Bureau for Economic Research data last month showed that, since the 2009 financial crisis, domestic real GDP growth has underperformed relative to both emerging market peers and average global growth.
The research showed that, under different assumptions regarding post-crisis growth and the elasticity of employment, the economy could have created between 500 000 and 2.5 million more job opportunities over the eight-year period.
Former commercial secretary to the UK Treasury, Lord Jim O’Neill, told the gathering that South Africa needed to improve its productivity levels.
“South Africa should focus on inflation stability and a credible fiscal and monetary policy framework,” he said.