One thing Adrian Gore would change about South Africa

Discovery CEO Adrian Gore thinks it is vitally important for the narrative around South Africa to change from one of perpetual decline to one of realistic optimism.

The potential effect of renewed optimism in the country can be seen in the rally in financial assets since the formation of the Government of National Unity (GNU) at the beginning of June. 

In the first 100 days since its formation, the rand strengthened by 5.8% against the US dollar, and local government bonds have surged, returning 17.8%.  

Although rising geopolitical tensions have stalled this rally in recent weeks, local assets have proven more resilient to external shocks than in the past. 

While this optimism has been contained to financial assets, it does benefit the ordinary man in the street through reduced inflation and reflects a potential shift in sentiment. 

Gore told Daily Investor in an interview that optimism is vital for any economy to grow and plays a key role in shifting the narrative around the country. 

He explained that it is important for the economy to grow, even at just 2% to 3%. The growth does not have to be dramatic. Even that level of growth will feel different to everyone compared to the stagnation of the past decade. 

South Africa also has a very strong job coefficient. This means that jobs are created when the economy grows, even at a relatively low level. 

Gore said that for every percentage point of economic growth, the South African economy increases employment by between 0.5% and 0.7%. 

This level of economic growth will also boost sentiment in South Africa and from foreigners towards the country. 

Gore said the narrative surrounding the country is both causal and responsive to economic growth. 

“We have got to try and ditch the sense that the country is in inevitable decline. The current thought is that no matter what happens, it will revert to decline. I think that stops investment.” 

“And so, if you can create a different narrative with economic growth, you will see people on the street feeling more positive and businesses investing more. The narrative in our country is always worse than it really is.” 

“I think, you know, if you change that narrative and give us some confidence with the economic growth, I think you will see a massive transfer of benefit to the ordinary person, and then you get a kind of a flywheel effect,” Gore said. 

Gore believes that South Africa is at an inflection point with the GNU, saying that it is well-positioned to capitalise on strong progress made by the partnership between the government and business. 

At the recent Bloomberg Future of Finance event, Gore outlined some of the progress made by this partnership in the three key areas of electricity, logistics, and crime and corruption. 

South Africa appears to have turned the corner in terms of load-shedding, with a 76% reduction in load-shedding since 2023 and 6,000 MW of new energy generation added to the grid. 

In transport and logistics, the private sector helped deploy over 500 security personnel along a key freight rail corridor with more than R700 million invested, Gore said. 

With regard to crime and corruption, the private sector has invested millions to reduce incidents of vandalism of key infrastructure. 

So far, these have led to a 50% reduction in security incidents on the coal line, and a Forensic Analysis Centre has been set up with an investment of R57 million. 

In phase two of this partnership, the aim is to hit the target of 3% GDP growth by the end of 2025. Economic growth drives job creation and shifts narrative – and a shift in narrative leads to more growth and investment, creating a virtuous circle

This level of sustained economic growth could generate 1 million additional jobs by 2030. 

Gore again emphasised the role of sentiment, saying it may seem like a fluffy idea, but it has been proven to drive concrete change. 

“I think it is amazing. It shows what South Africans can do with a clear focus – gigawatts on the grid and megatonnes through the logistics network. This is a testament to both the government and business.” 

Gore said this exemplifies how quickly things can be changed and how South Africa’s decline can be reversed. 

“The GNU is a very, very big step. I think South Africa has an amazing set of attributes; the manifestation of this is the GNU.” 

“There is a lot still to do, and risks are associated with it, but we are moving in the right direction.”