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Batten Down The Hatches




Twenty eight million. That’s the number of people in Africa who will die from cardiovascular illness, diabetes, and other non-communicable diseases, according to the World Health Organization. That’s 46% of all deaths in Africa by 2030. Half of these deaths, according to a 2017 article in the BMC Public Health journal, are because hospitals aren’t good enough.

“Large numbers of our people continue to die prematurely and to suffer unnecessarily from poor health. Treatable conditions are not being treated on time and preventable diseases are not being prevented,” says South Africa’s Health Minister Aaron Motsoaledi on his department’s website.

It is because times are tough in South Africa. Gross domestic product growth was -0.7% in the first quarter of 2017, while unemployment increased to 27.7%. Medical aid is expensive. It costs about R4,500 ($340) a month, on average, for a family of four. That is almost half of South Africa’s average salary of R10,680  ($815) per month, according to BankservAfrica. It means a mere eight million people, out of 55 million, can afford cover.

To make matters worse, last year, 16 of the top 20 medical aid schemes had to reach into investment funds to stay afloat. It also meant that, this year, scheme members received price increases, on their cover, far higher than consumer price inflation.

READ MORE: Suffering And Waiting On The Wrong Side Of The Divide

It is so bad the South African government wants to start National Health Insurance (NHI), the first step to free healthcare for all, by 2025, bankrolled by the tax payer.

The NHI White Paper says the money that people pay for private health should be directed to funding the NHI. According to Paula Armstrong, an economist at Econex, an economic consulting firm, even though medical schemes received about R18.5 billion ($1.4 billion) from a medical scheme tax credit, in 2014/15, redirecting some of this money won’t be enough and it is the poor who are likely to suffer.

“The removal of medical scheme tax credits will affect poorer medical scheme beneficiaries disproportionately. In total, 21.86% (1.9 million in 2016) of medical scheme beneficiaries will move above the affordability threshold with the removal of tax credits. The disproportionate effect on relatively poorer households will need to be considered when evaluating the rationale for removing medical scheme tax credits to help fund the NHI,” she says.

Some medical aid schemes are suffering anyway. Between 2000 and 2015, according to Alexander Forbes, the number of medical aid schemes reduced from 144 to 83. If government presses ahead with free health, they are going to lose out even more.

“I see small schemes consolidating and move into larger risk pools… Bigger pools provide bigger sustainability and that’s where I think we will see smaller schemes suffering, going forward,” says Gerhard Van Emmenis, Principal Officer of South Africa’s second largest open medical scheme, Bonitas Medical Fund.

The big question is how many of these medical aid schemes will survive.

“We do believe, at Bonitas, that we should have both, private medical schemes and NHI. You can’t just destroy or dismantle national assets like medical schemes that have proven over the years that they can contribute to the healthcare industry,” says Van Emmenis.

According to the White Paper, NHI will tackle the most needy first. That is healthcare at schools, childhood cancer, women’s health, the elderly and the disabled. Most of the people will have to wait.

“For NHI to be a success, collaboration between medical schemes and government is essential. There needs to be agreement on the roles of both players as well as which benefits will be covered by the NHI and which can be offered by the medical schemes.”

Gerhard Van Emmenis, the Principal Officer of Bonitas. (Photo by Motlabana Monnakgotla)

According to Van Emmenis, specific conditions, such as mental and dental, may not be fully covered by NHI. This is the gap where private schemes could find business. Van Emmenis says medical aid schemes should find a way to work with government, instead of fighting it.

“Primary healthcare might be accessible to everyone, but then there’ll always be a complementary environment with dental benefits and a lot of other things, which is not necessarily life threatening but can improve the quality of your life. You may need packages that will attend to stress, for instance… That’s where we are going to play a part in the future,” he says.

READ MORE: Healthcare Has Got To Be Available To Everybody

The problem is, there is no clarity on whether people will be allowed to belong to a private medical aid scheme in the future of free health. To make it worse, the cost of the NHI is likely to be heavy, according to Econex. It is expected to increase healthcare costs from R121 billion ($9.2 billion) for the 2015/2016 fiscal year to R256 billion ($19.5 billion) for the 2025/2026 fiscal year. The government argues it is not going to be expensive but Econex says the annual health budget is likely to increase by R200 billion ($15 billion), and not the R108 billion ($8.2 billion) stipulated in the White Paper.

NHI not only faces money problems but also has scarcity at hospitals and a blundering bureaucracy. To add to that, it would use a standard price list that may be cheaper for patients but, in the long term, less rewarding for doctors. Doctors could work longer days for less money and could look outside Africa for work.

“You’d get an orthopaedic surgeon that only works on hands and is a specialist in that… That guy will detect what sort of charges he’ll charge for his services. You can’t just take it away and decide to pay all orthopaedic surgeons the same money. I can promise you which one will be on the first plane leaving the country, it will be the guy who’s a specialist. If a doctor leaves this country today, it takes us at least seven years to replace that doctor,” says Van Emmenis.

The private hospitals that are left will also suffer.

The 2014 National Income Dynamics Study, by the Southern Africa Labour and Development Research Unit at the University of Cape Town, surveyed 28,000 people in 7,300 households and found that 41.5% of them used private healthcare in their last medical visit.

“The reality is that many people use a combination of both sectors. It means the number of people with medical aid does not equate to the number of people using the private health sector. The converse is also true with some medical scheme members using public hospitals or state clinical protocols for the treatment of specific conditions such as tuberculosis,” says Van Emmenis.

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Van Emmenis says Bonitas is in favor of healthcare being cheaper and wider, but wants more consultation.

Matthew Prior, Funder Relations and Health Policy Executive at hospital group, Life Healthcare, concurs.

“Until the NHI benefit structure has been defined it is difficult to say what the impact will be. In addition, the role of private medical schemes is couched in vague terms, as the benefits that will be offered by the NHI have yet to be determined,” he says.

Life Healthcare had about 600,000 admissions, in 2016 alone, excluding outpatient and emergencies, and 95% of those were patients covered by a medical scheme. Prior says Life Healthcare agrees with the fundamental objective of the NHI but much depends on how it is implemented. He says improving the nation’s health, by addressing the challenges within the healthcare sector, is a massive undertaking and a responsibility that government should not shoulder alone.

“Although the White Paper mentions shortage of staffing, there does not appear to be a coherent plan to increase supply of medical professionals to meet NHI demands. A massive re-organization of the entire healthcare system, where there is an acknowledged shortage of management skills, places any fundamental change to the healthcare system at risk,” he says.

Prior says it is also not accurate to assume that by changing the financing structure and directing more money to the public sector will, on its own, improve the delivery of quality healthcare to all South Africans.

“The key issues around healthcare resources, management skills and leadership must be properly addressed. Recruitment of doctors on contract from foreign countries is a necessary measure in the short-term but it does not build long-term, sustainable capacity in the country,” he says.

Making matters more complicated, research by Econex shows that removing medical aid tax credits will make medical aid schemes too expensive for one in five.

“Members leaving private healthcare will place additional burden on an already overburdened public sector. One would also need to carefully monitor whether organized labor will accept the impact of the tax credit removal on net income,” says Prior.

If history is anything to go by, this is not the end for medical aid companies. About 10 years ago, South Africa introduced the Government Employees Medical Scheme. It got many worried, but some private medical aid companies, like Bonitas, grow regardless.

“Bonitas had 85,000 members that belonged to government that had to go to GEMS. We had about 216,000 members and everybody thought Bonitas was going down, but today we have about 350,000 members… So with the possibility of NHI, we have shifted our emphasis and visions to developing products that can and will be complementary,” says Van Emmenis.

Private money is likely to survive the biggest shake-up in Africa’s health system, whatever the weather.

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Cover Story

Forbes Africa | 8 Years And Growing




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As FORBES AFRICA celebrates eight years of showcasing African entrepreneurship, we look back on our stellar collection of cover stars, ranging from billionaires to space explorers to industrialists, self-made multi-millionaire businessmen and social entrepreneurs working for Africa. They tell us what they are doing now, how their businesses have grown, and where the continent is headed. 

Since its inception in 2011, and despite the changing trends in the publishing industry, FORBES AFRICA has managed to stay relevant, insightful and sought-after, unpacking compelling stories of innovation and entrepreneurship on the youngest continent, in which 60% of the population is aged under 25 years.

 Many of those innovations have been solutions-driven as young entrepreneurs across the continent seek to answer questions that have burdened their communities.

 Always on the pulse, FORBES AFRICA has chronicled and celebrated those innovations – prompting the rest of the globe to pay attention and be fully engaged.

 A prime example of this is the annual 30 Under 30 list, which showcases entrepreneurs and trailblazers under the age of 30 from business, technology, creatives and sports. In 2019, we had 120 entrepreneurs on the list, finalized after a rigorous vetting and due diligence process to well laid down criteria.

 We have always maintained the highest standards of integrity in all our reporting.

 As we transition into the next milestone, FORBES AFRICA reflects on the words of civil rights activist Benjamin Elijah Mays, who once said: “The tragedy of life is not found in failure but complacency. Not in you doing too much, but doing too little. Not in you living above your means, but below your capacity. It’s not failure but aiming too low, that is life’s greatest tragedy.”

 With the transformation in the media landscape, the recent awards given to the magazine for the work done by a hard-working, determined and youthful team, serve as a reminder that we are doing something right.

 Early this year, FORBES AFRICA journalist Karen Mwendera received a Sanlam award for financial journalism as the first runner-up in the ‘African Growth Story’ category. In January, FORBES AFRICA’s Managing Editor, Renuka Methil, received the ‘World Woman Super Achiever Award’ from the Global HRD Congress.

 In reflecting on the last eight years, this edition revisits a few of the strong, resilient men and women who have graced our covers.

For some, fortunes have literally changed, as witnessed in the fall of gargantuan African empires such as Steinhoff. Of course, there have been massive moments of triumph too, which have seen some new names feature on the annual African Billionaires List. There have also been moments of tragedy with former cover stars passing away.

 Africa is ripe for the taking and is seen as the next economic frontier. The unique position the continent finds itself in will no doubt give FORBES AFRICA plenty to report on. Here’s to more deadlines and debates for the next eight years.

– Unathi Shologu

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Mastercard: Diligent About Digital In Africa



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Mastercard knows only too well that technology can drive inclusive financial growth with simpler and more efficient ways to do business and life. And Raghu Malhotra, the man spearheading this trajectory in Africa, is also focused on social progress.

In many ways, Raghu Malhotra is like the brand he works for, leaving his footprints in different parts of the world, and in some cases, the most unlikely corners.

On a scorching summer’s day in June 2016, Malhotra traveled 100km east of Jordan’s capital city Amman, to a camp with white tents named Azraq built for the refugees of the Syrian Civil War.

In the desert terrain and hot, windy conditions, people had to queue for hours on end for plates of food handed out of visiting trucks. But some of them, displaced and homeless overnight, expressed their gratitude to Malhotra, President for Mastercard in the Middle East and Africa (MEA).

Mastercard, a technology company that engages in the global payments industry, had distributed e-cards, as part of a global collaboration with the World Food Programme, to the refugees that they could now use to purchase food and other supplies from local shops.

READ MORE | The Big Bank Theory: South Africa’s Banks Of The Future

 “I spoke to the people myself and saw what their lives were… Even those who were doctors with their families and were displaced… They said to me ‘you have restored dignity to our lives; you have no idea how demeaning it is to queue up to be given food’… We actually digitized how that subsidy for food was given. Some of these things go beyond economics,” says Malhotra. 

Beyond economics.

That very simply sums up Malhotra’s mandate for Africa as well.

The New York-headquartered Mastercard, ranked No. 43 on Forbes’ list of the World’s Most Valuable Brands, with a market cap of $247 billion, which connects consumers, financial institutions, merchants, governments and business, is fostering key partnerships across the African continent to help drive inclusive economic growth.

The idea, Malhotra says, “is to get our global skill-set to operate in its most efficient form in every local economy, at the same time, we must do good, and it must be sustainable.”

He calls Africa the next bastion of growth for various industries.

“As a company, we have stated we are going to get 500 million new consumers globally. And Africa plays a big part of that whole story… We want to be an integral part of various economies here,” says the man responsible for driving Mastercard’s global strategy across 69 markets.

Raghu Malhotra President for Mastercard in the Middle East and Africa. Picture: Motlabana Monnakgotla

“It probably took us over 20 years to get the first 50 million new consumers, in my part of the world, which is the Middle East and Africa (MEA). It took us probably five years to get the next 50 million, and last year alone, we put over 50 million consumers [in the formal economy] in MEA. That is part of our whole African story, so this is just not rhetoric; we are actually building our business on that basis.”

Home to four of the world’s top five fastest-growing economies, Africa has the fastest urbanization rate in the world, the youngest population, and a rapidly expanding middle class predicted to increase business and consumer spending.

It’s a continent of opportunity for global players like Mastercard with an eye on the potential of a booming consumer base and small and medium entrepreneurs, most of whom are still not a part of the formal economy. A large proportion of Africa is still unbanked. There is enough business opportunity in offering people digital tools so they can lead respectable financial lives.

READ MORE | The Monk Of Business: Ylias Akbaraly Talks About Secret To Success And Plans To Take Africa With Him

But it is in knowing that financial inclusion is not just about technology, but more about solving bigger problems, as the World Bank says in its overview for Africa: “Achieving higher inclusive growth and reaping the benefits of a demographic dividend will require going beyond a business as usual approach to development for Africa. Going forward, it is imperative that the region undertakes the following four actions, concurrently: invest more and better in its people; leapfrog into the 21st century digital and high-tech economy; harness private finance and know-how to fill the infrastructure gap; and build resilience to fragility and conflict and climate change.”

And in order to enable financial access, Mastercard has a balanced strategy in place, with the right partnerships for inclusive growth on the continent, Malhotra tells FORBES AFRICA.

“Every emerging market has different segments of people and you need to get the right product for the right segment. What we do is a balanced growth strategy across the continent based on timing, opportunity etc… Of course, because the bottom of the pyramid is much bigger, I think what we need is to adapt things differently; that is where the inclusive growth story comes from. That is where the opportunity is, but there is a second part to it…” And that, he summarizes, is advancing sustainable growth, doing good and bringing more transparency and efficiency.

The new pragmatic dispensation of governments in Africa towards ideas, technology and innovation has surely helped open up the stage to newer segment-driven products, especially as Africa already has such global laurels as Safaricom’s mobile money transfer and micro-financing service M-Pesa that took financial access to a whole new level. Also, sub-Saharan Africa remains one of the fastest-growing mobile markets in the world.

READ MORE | Feisty And Fearless Pioneers Thandi Ndlovu & Nonkululeko Gobodo

Malhotra says he finds African governments consistent in how they are rolling out their digital vision, and in trying to collaborate towards creating better ecosystems for their economies, though each is unique with its own dossier of problems.

“When I speak to various governments around Africa, I see a commonality of what their needs are and I also see a commonality in how they are trying to respond. So I think a lot of them realize running cash economies is a very inefficient way of doing things… Also, the consumer base is much more open to new technology because there is no bedded infrastructure or legacy infrastructure. I think where governments need to start thinking a bit more is how much do they want to do completely on their own.”

Part of this transformation on the path to financial progress is alleviating the burden of cash. Cash still accounts for most consumer payments in Africa. Mastercard, which started out as synonymous with credit cards, continues its efforts to convert consumers from cash to electronic transactions, and move beyond plastic.

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Pioneer For Women In Construction Thandi Ndlovu has died




The cover of the August (Women’s Month) edition of Forbes Africa beautifully captures the essence of the woman I interviewed only a few weeks ago. Gracious, soft-spoken, brimming with life and energy. Dr Thandi Ndlovu impressed the entire Forbes crew on that afternoon cover shoot with her broad smile, and open yet powerful demeanor.

It is with great sadness that Forbes Africa heard of the accident that took her life on Saturday the 24 August 2019.

READ MORE |COVER: Feisty And Fearless Pioneers Thandi Ndlovu & Nonkululeko Gobodo

She had given so much to South Africa and its people – through the apartheid years and during the 25 years of democracy, literally building a better future, first through her medical practice at Orange Farm and then through her company, Motheo Construction Group and the scholarships for tertiary education granted by her Motheo Children’s Foundation.

That sunny winter’s afternoon, I asked her if she, at the age of 65, was considering retirement, and she laughed. A lively, amiable laugh. She told me she was healthy and strong and easily worked 12 to 13 hour days.

READ MORE | WATCH | Making Of The Women’s Month Cover: Thandi Ndlovu & Nonkululeko Gobodo

She loved hiking, and has climbed Kilimanjaro twice, reached the base camps of Mount Everest and Annapurna in Nepal. At the time of the interview, she was training to climb Machu Picchu, the famed ruins in Peru’s mountains.

One of her biggest passions was to make a difference in people’s lives and to motivate people to achieve the best they could. The other was to redress the racial tensions that still remained in South Africa.

Dr Thandi Ndlovu, South Africa is poorer for your passing.

-Jill De Villiers

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