Read the Conversation
EF: What are the priorities of the Business Unity South Africa?
CC: For the past few years, businesses in South Africa have been actively working on addressing energy, logistics, law and other challenges. We have made progress independently, although we would have hoped to work closer with the government. Our research has allowed us to provide empirical evidence on the steps necessary to address these challenges and stimulate investment and growth. Throughout the COVID-19 pandemic, hundreds of professionals generously volunteered their time to help manage the crisis, distribute vaccines, and mobilize the private sector to administer them.
Our commitment to working with the government remains strong, recognizing the private sector's resources and capacity. We respect the government's choice to collaborate with us, but we will not impose our partnership. Our new approach entails identifying the most critical national issues, showcasing our achievements, highlighting areas where we require their input, and initiating a constructive dialogue. We have already presented our findings and hope the government will be willing to engage with us further. We aim to work with the government to create a better future for all South Africans.
Despite the challenging business, economic, and social conditions, our business community is still patriotic, devotedly investing substantial resources, and demonstrating exceptional work capacity. We aim to continue making significant strides with the government in the coming months, transcending political differences, and keeping business momentum.
EF: How do you see a Sustainable approach in South Africa?
CC: In South African business, sustainability encompasses more than environmental and climate considerations. It reflects our ethos, stakeholder engagement, and national interest. All businesses must be answerable to their stakeholders. Amidst transitioning challenges and climate change opportunities, the business community has shown exceptional commitment to sustainability. Sibanye, the top platinum primary producer, proactively provides water, services, and upliftment to neighboring communities. South African businesses consistently monitor their ecological and social impact. We also fulfill our role in combatting climate change by adhering to annual decarbonization targets to reduce our carbon footprint.
EF: What would be your advice to organizations willing to invest in manufacturing in South Africa to create local development in the healthcare sector?
CC: Our goal is to foster an investment-friendly environment; primarily, it is the government's responsibility. Convincing investors of our openness to investment is increasingly challenging. Despite having investment envoys working to attract investment, it takes time to persuade investors. Consequently, investments are flowing into East Africa, which is currently more investor friendly. We closely follow the government's national health insurance plan's development in the healthcare sector since it must include the private sector to bolster investors' confidence. Interfering with other sectors, especially the private sector, could harm the economy. The private healthcare sector is willing to collaborate with the public to establish sustainable universal healthcare.
RH: To attract investments, two aspects must be considered: investment in health goods and services and the impact of health regulation on attracting investment generally. Access to quality healthcare services is crucial in attracting investment across the economy. Thus, building an integrated healthcare system and addressing the massive inequality in access is critical. Achieving universal health coverage in South Africa requires innovative approaches. To make the healthcare space attractive to investors, we must preserve access to quality healthcare services and demonstrate progress.
EF: How do you see global inflation evolving and impacting the business models in South Africa?
RH: The challenge we face is better integration between public and private spending. This can be achieved by implementing a better-integrated healthcare model rather than our current two-tier model. We need to take a more coordinated approach to fund social benefits, including social security, health, and education, which are interrelated and compete for additional expenditure at the macro level. We currently have a range of social security reform proposals and a massive proposal for healthcare reform. These reforms are not being co-ordinated, but rather operate in silos and have significant macro-economic implications. Encouraging innovation in healthcare can broaden our reach and access to quality care, ultimately benefiting all South Africans. A co-ordinated approach to reform as well as collaboration of the private and public sectors will more effectively deliver services to all.
CC: We have urged the government to prioritize improving the public healthcare system. Currently, the system is in a dire state and requires attention. We propose a hybrid mechanism combining the best aspects of public and private healthcare to broaden and sustain universal care. This will address the issues that must be tackled in the public healthcare system.
South Africa's economy contracted by approximately 1.3% in the last quarter, leading to a narrow fiscal base. As a result, we must make choices and trade-offs for a more holistic approach to address and improve the pension, education, social, and health systems sustainably.
Attracting investment and a growing economy requires a business model that works. To instill confidence in investors, the private sector must be involved in managing these affairs.
EF: What three recommendations are the key to attracting investment and providing a solid foundation to attract investment and create trust?
CC: Attracting investment and creating trust is simple with these three key recommendations. Firstly, the government must provide basic services and improve living conditions. Secondly, a real partnership with the private sector can utilize capacity and resources for the nation's benefit. This enables the government to deliver, which is a weak spot. Thirdly, a transparent government should have clear and decisive leadership with one voice in the cabinet. Fundamental economic reforms should not include land expropriation or compensation, and the government must create a safe environment for investors by providing certainty. Other African nations are succeeding, and we can do it too.
Decisive leadership can make all the difference when it comes to attracting investors. The energy sector is a prime example. By creating a favorable investment environment, the private-sector investment will flow. Last year, the president increased the required embedded energy from 10 to 100 megawatts, and more than 100 projects worth 4 billion Rands are now in the pipeline. However, regulatory hurdles must be overcome before these projects can proceed. The challenge is that the power will take a few years to get into the system. Still, if this decision had been made earlier, it would have significantly impacted the current crisis. To attract more private sector involvement, we are working to broaden the investment flow and open more space in logistics. By making these simple decisions, we can create an environment where investors feel confident and excited about South Africa's potential. It all comes down to a few simple choices from decisive leadership.
RH: Regarding investment in the Healthcare sector, the first recommendation is to attract investment by building trust. The healthcare system must be strengthened, which involves investment to improve care quality in the public sector, increasing efficiencies in the private sector, and retaining skilled healthcare professionals. Addressing the inefficiencies in the private sector is crucial, and the Health Market Inquiry provides a roadmap for enhancements. There is also a need to build a more integrated training capacity to retain world-class skills in the healthcare system. Private sector entities supporting the training of healthcare skills should be embraced rather than taken over.
The second recommendation centers on the integration of financing. To unlock the potential of public and private sector financing, the Council for Medical Schemes has been working on a low-cost benefit option framework. This regulatory change will enable two and a half to five million plus people to access pre-funded primary care coverage, largely funded by employers and supported by a tax credit. This innovative and accessible approach would attract investment into the health sector, promoting primary care delivery. It would also stimulate innovation, tapping digital developments to provide affordable primary healthcare. Supplementing the public sector's delivery would free up resources to the benefit of more vulnerable people who rely solely on the public sector.
The third recommendation is to take a coordinated approach to reform to achieve optimal results. The challenge is that various government sectors work in silos, hindering constructive engagement. The tension between the treasury and health sectors as well as between public and private sectors is debilitating and counterproductive. We must foster a collaborative environment to drive progress and achieve our desired outcomes of improved access to care.
EF: Do you think the government recognizes your efforts in initiatives that will change their perspective on the energy situation and the value of these potential investments? And can this be translated into the healthcare system?
CC: Despite the current load-shedding crisis, the most progress we have made in our discussions with the government is on energy. The president’s energy plan is commendable and is aligned with 80% of our priorities for energy. The plan must be implemented quickly to achieve the desired results, even though we will only see the results in two years. According to the plan, the private sector will account for 85% of energy generation in the next five years. To facilitate this, the National Energy Crisis Committee must create a conducive environment for private sector participation. We have secured 100 million rands to procure expertise for the committee, which will not be handed over to the government. The energy plan will instill confidence in the public and investors, and we hope to replicate this success in the healthcare sector. Eskom's restructuring is part of the plan. With a dedicated focus from the government and the presidency, we can work together to achieve our goals.
RH: The low-cost benefit option is a significant opportunity that has undergone a six-year consultation period, with some interruptions due to the pandemic. It aligns with the government's focus on primary and promotive care and presents an opportunity for partnerships. We must dispel the notion that universal health coverage must be delivered through public healthcare. The government's key role is to create a regulatory environment that provides access and protection for healthcare delivery. Balancing the regulation and delivery of healthcare and health coverage is crucial in creating an environment consistent with government policy. This initiative can be considered part of the government's health policy implementation as it follows an extensive consultative process.
EF: Do you think the government is still sticking with NHI because they mentioned it long ago, or are they open to new alternatives with better outcomes?
RH: The current binary view of national health insurance is counterproductive because inputs are simplistically characterized as either for or against national health insurance. Rather than viewing the NHI as a threat, it should be seen as an opportunity for public-private collaborations to improve healthcare access for underserved populations. While a single funder for universal health coverage may be viewed as the policy ideal, we must work with what we have and focus on building trust between both sectors. The COVID-19 crisis demonstrated the value of collaboration, and the value private sector support can add, and we hope to build on that trust for sustainability. The private sector recognizes that contributing to universal health coverage is essential for a sustainable economy and the NHI Fund has an important role to play in building public-private partnerships. Ultimately, it is crucial to establish an environment of trust and collaboration for the successful implementation of NHI policies.
EF: What is your expectation of the public and private sectors in making South Africa an exemplary country to achieve universal health coverage and a sustainable healthcare system?
RH: As a country, we have the potential to become a model for exemplary healthcare delivery. However, creating equitable access to healthcare in such a diverse country is complex. We have learned much from the past and must unite to strengthen our healthcare system. Trust is key, as each party has a valuable role in achieving the same objective. Let us learn from our past experiences and work towards a shared vision of accessible healthcare.
CC: Collaboration was the key to our success during the pandemic. In the health sector, failure to collaborate can have dire consequences. Ironically, the Department of Health and the private sector have a good track record of working together. However, we are currently at odds over universal health coverage. To achieve this goal, we must use the combined resources of the public and private sectors and ensure sustainability in delivery and funding. Our joint objective is clear, and we need to focus on what is in the national interest. The most crucial factor is the president's decisiveness. We must set politics aside and work towards a common goal.
Despite the situation, we remain optimistic about the future. As patriotic South Africans, we are frank and critical because we believe it can make a difference and improve things. We aim to align minds and the government in the nation's interest.