Things are getting better in South Africa – Profmed

Professional medical aid scheme Profmed said things are looking up for South Africa, with the country showing signs of improvement despite numerous challenges. 

Profmed is a medical aid scheme designed specifically for professionals in fields like medicine, accounting, law, engineering, architecture, and academia. 

Last week, it released a White Paper that focussed on the emigration of skilled professionals and how they could be encouraged to stay in South Africa. 

The company said South African professionals remain in high demand from other developing nations, particularly developed nations in Europe and North America. 

South African professionals have a global reputation for being hard workers, easily integrated, and problem solvers, with international companies constantly trying to entice professionals to leave the country.

Profmed said that over the past few years, it has noted an uptick in the number of professionals exiting their memberships with the company, and its target market is declining.

However, it also highlighted that, in some cases, things are better in South Africa than abroad for professionals, with some reluctant to go and many wanting to return. 

The company focused on improvements made in the financial sector, government reforms, and an increasing focus on how the country can produce and retain more skilled professionals. 

Profmed estimated that, in response to the perceived brain drain, over R2 billion has been spent by the government to encourage businesses to stay in South Africa through no-return grant schemes. 

It also noted that its analysis shows media coverage of emigration out of South Africa is not supported by emigration statistics, with far fewer professionals emigrating than commonly suggested. 

Profmed’s analysis indicates that many South Africans in the 34 to 42 age bracket are considering returning to South Africa. This is because of the better quality of life relative to the cost of living in South Africa compared to other countries. 

The South African Reserve Bank’s (SARB) proactive response to inflation shocks post-Covid and the strong regulation of the financial sector means the country has been shielded from banking crises in Europe and the United States. 

This also makes the country an attractive investment destination. 

The company also noted the high quality of healthcare provided by South Africa’s private sector, which has fared remarkably well compared to state-run alternatives such as the United Kingdom’s NHS. 

Profmed cited Old Mutual chief economist Johann Els, who said South Africa’s economy is expected to improve over the medium term due to recent policy improvements.

He says the shift towards more private sector involvement in energy investment and logistics should go a long way in boosting confidence. 

Els added that the recent energy reforms announced by President Cyril Ramaphosa are the most consequential structural changes seen in South Africa to date.

Absa echoed this in its interim results presentation last month.

Despite the challenging environment in 2023, economists at Absa said South Africa’s full-year economic performance will be better than initially forecasted.

“Despite the sharp escalation in load-shedding, economic activity in H1 2023 was healthier than we expected,” Absa said.

“Electricity supply will continue to be a growth risk, but we believe that ongoing efforts in private generation will make the economy more resilient over time.”

However, the group admitted that overall growth momentum would likely remain weak due to strained business confidence limiting the generalised investment cycle, with household consumption growth also under extreme pressure.

For consumers, there is possibly good news ahead, with the group’s economists saying that headline inflation will likely ease further and that the Reserve Bank has ended its interest rate hiking cycle.

“We expect the SARB to cut rates from March next year,” Absa said.

Despite having a more positive perspective on the economic data, the bank recognised that risks and uncertainties could still hamper future economic growth.

Absa is not alone in having a more bullish outlook for the rest of 2023.

Economic data published last week by Stats SA for the mining and manufacturing sectors pointed to a more robust second-quarter GDP performance than initially expected, with economists and analysts pencilling in more substantial growth for the full year.

While this comes with the caveat – and warning – that third-quarter growth may not carry the momentum, the data has come as a pleasant surprise given the dismal forecast and outlook at the start of the year.