Welcome to Mind Matters week of 28 March 2022

Global and local economic news

China’s Consumers Face Deeper Economic Damage From Covid Lockdowns

China is facing a temporary hit to factory production and a lingering consumer slump amid the strictest Covid controls since the initial outbreak two years ago.

China is one of SA's greatest trading partners and a major player in keeping the global economy buoyant. Gain perspective from this article on the fine balance China is trying to achieve with its Covid Zero strategy and mitigating its impact on its economy.  4 min read

Costs of war mount in Europe as inflation soars, growth sags

The economic damage from the war in Ukraine is worsening across Europe as already-record inflation soars further and Germany faces a danger of recession because of its dependence on Russian energy.

President Vladimir Putin’s invasion has sapped euro-area confidence and sent consumer-price expectations to their highest level since records began in 1985.In Spain, inflation surged by almost 10% in March — the most in nearly four decades — while it also topped expectations in Germany. In the continent’s biggest economy, advisers to Chancellor Olaf Scholz slashed the growth outlook and said there could be a contraction if natural gas supplies are shut off.

Some perspective on the dependence on resources from Russia that feeds into inflation. 3 min read

Research initiative to tackle food security, global warming#

In an effort to bolster cooperation between European and African countries as they face joint challenges in agriculture, food and the environment in a context of climate change, two French science bodies, in cooperation with 20 African universities and institutes along with three sub-regional organisations, have launched a research initiative to improve food security, fight global warming and tackle youth employment, among others.

More collaboration across countries is required to achieve all our goals as a healthy planet and economy. 4 min read

To solve climate, first achieve peace

The horrific invasion of Ukraine by Russia has many devastating effects. The most immediate are on the people of Ukraine, but the long-term implications for the entire planet are enormous. 

The impact of climate change on national and global security is not new. But this association was not always front and center. 

This is a very good opinion piece from Science.org bringing the association centre. 4 min read

Basic income grant or NHI will result in tax increases, says Treasury

Large permanent increases in government spending, such as for a basic income grant or National Health Insurance (NHI), will have to be met by a permanent increase in revenue, which will mean higher taxes, Ismail Momoniat, National Treasury’s deputy director-general for tax and financial sector policy, told Parliament’s Standing Committee on Finance.

This topic has appeared in a lot of press this past week. Important to watch the space as you prepare to enter the workplace as a high earner.  4 min read

Godongwana admits South Africa is a hard sell

In addressing the thorny issue of attracting investors to South Africa, Finance Minister Enoch Godongwana and Derek Hanekom deserve full marks for their honesty.

A good 4 min read with opposing views on whether SA is a good place to invest. 

Landmark move as South Africa gets more private electricity to take on Eskom

The National Energy Regulator of South Africa has awarded a private electricity trading licence for the first time in over 12 years, as the country looks to move away from Eskom’s power monopoly.

The license enables Enpower Trading to source competitively-priced, predominantly renewable power from multiple independent power producers (IPPs) and small-scale generators, transport or ‘wheel’ this energy across the national and municipal grid networks, and sell it to customers at a discount to prevailing electricity tariffs.

Some positive news for SA! 3min 30 sec read

South Africa is heading towards a 50% unemployment rate: unions

The Congress of South African Trade Unions (Cosatu) has raised alarm bells over South Africa’s record high unemployment rate which is steadily creeping towards the 50% mark.

Data published by Statistics South Africa on Tuesday (29 March) shows that the country’s official unemployment rate rose 0.4 percentage points to a record 35.3% in the fourth quarter of last year. However, the expanded definition of unemployment is currently sitting at 46.2%.

“There is a real danger that it may rise in the next quarter as the war in Ukraine unfolds and the global oil and domestic fuel prices skyrocket,” the trade federation said.

A stark reality and one we need to confront. 3 min read

Tackling Inequality

Probing the results of a major study into our unequal society. Faisal Islam, BBC Economics Editor, talks to two leading experts on inequality, who have together been working for several years on a research project for the Institute for Fiscal Studies. He asks Paul Johnson, IFS Director, and Nobel laureate Sir Angus Deaton what the findings reveal about the UK now, and how these issues can be addressed.

A very engaging BBC broadcast. The principles are universal and can be applied to us in SA.  27 min 32 sec broadcast

Industry News

Adjudicator overstepped her authority in deciding that pension fund’s rule did not apply retrospectively

The Gauteng High Court has overturned a determination by the Pension Funds Adjudicator, ruling that she exceeded her jurisdiction and did not follow a fair procedure when deciding that a fund’s amended rule did not apply retrospectively to an accrued benefit.

The court also condoned the late filing of the applicants’ appeal, saying leaving the determination unchallenged posed a threat to the sustainability of the fund.

This article will show you how important it is to stick to ones designated line of inspection, also how easy it is to be misled by context.  Is it about fairness? 4 min read

It takes an average of 8 years to produce an actuary - transforming South Africa’s smallest profession

Of the 2.1 million people employed in South Africa’s formal finance sector in the third quarter of last year*, actuaries constituted less than 0.1%. This is because there are less than 2 000 actuaries in South Africa, most of whom are members of the Actuarial Society of South Africa (ASSA).

An actuary is either an Associate Member of ASSA (AMASSA) or a Fellow of ASSA (FASSA). Student members and technical members are not actuaries and may not use this title.

This is a must read for you as an aspiring actuary. You will note the encouraging statistics! Read this with a sense of pride and a lens on what it means to be an actuary. 5 min read

NEW LEADERSHIP TO TRANSFORM THE ACTUARIAL PROFESSION

"By listening with the aim of first understanding a target market’s circumstances, challenges, culture and needs, actuaries will be in a better position to develop solutions that solve a particular problem.”

This is a quote from our ASSA President Tjaart Esterhuyse and it sets the tone of his two year tenure. Once again this ties in with the theme this week of truth and our ethical response to challenges. A good 7 min read in the latest COVER magazine on page 53. The Magazine is freely available for you to read or download from COVER. 

Actuaries: Social Inflation Increased Commercial Auto Claim Costs by $20B Over 10 Years

The insurance industry is ringing alarm bells about the cost of social inflation again, this time with the help of an actuarial analysis that concludes the phenomenon added more than $20 billion to the cost of commercial auto claims over a decade.

The Insurance Information Institute teamed up with the Casualty Actuarial Society to measure excess losses that cannot be explained by regular increases in the Consumer Price Index. 

This article is based on the USA, well worth a read as it can used comparatively or as a benchmark of trends over the past decade. 4 min read

Fintech and AI 

FNB to build 1 700-strong data analyst army

First National Bank (FNB) is looking to hire as many as 200 data analysts, as the big-four bank aggressively looks to tap into its rich data assets... but is struggling to find the requisite skills to fill the 200 vacancies.

Data analytics is the study of data to further interpret and process it to convert it into meaningful insights for making smart decisions.

The increasing interest in the use of data analytics in the banking industry is due to changes in technology, people’s expectations, market structure and behaviour, which prompted banks to put analytics at the core of their business.

Sharpen your data analytical skills and you will be able to progress in the financial services sector - that's the message. 5 min 40 sec read

116. Katya Sedova - AI-powered disinformation, present and future

Researchers and business leaders at the forefront of the field unpack the most pressing questions around data science and AI.

A probing PODCAST which you can enjoy talking a walk or cooking in the kitchen! 47 min

117. Beena Ammanath - Defining trustworthy AI

Trustworthy AI is one of today’s most popular buzzwords. But although everyone seems to agree that we want AI to be trustworthy, definitions of trustworthiness are often fuzzy or inadequate. Maybe that shouldn’t be surprising: it’s hard to come up with a single set of standards that add up to “trustworthiness”, and that apply just as well to a Netflix movie recommendation as a self-driving car.

Just over 30 min of vibrant conversation on the topic, making you think about the use of AI to enhance value before understanding its full impact. 

Investment news

The fund industry must find ways to retain female talent

Female staff retention is still a problem in the industry, and the solutions to burnout and lack of promotion opportunities are far from being resolved.

LONDON: Men continue to dominate the investment industry. In Citywire’s fund manager database, only 11.8% of fund managers are women, compared with 87.5% men (0.7% are unknown).

The lack of female role models puts off early female talent from entering the corporate pipeline. The turnover rate for women who do work in the fund industry is much higher than for men – 44% compared with 31% – according to a decade of data gathered by Citywire.

A 3 min read to encourage all to do what they can to improve the chances of women succeeding in a career in finance. 

Business Talk – Revix’s Sean Sanders on whether DeFi can challenge traditional finance

Sean Sanders is the founder and CEO at Revix – an intelligent investment management platform that makes it easy for South Africans to access cryptocurrency investment and trading.

Sanders has extensive experience in both tech and finance and is incredibly passionate about how these two industries combine through cryptocurrency.

In this episode of What’s Next, Sanders breaks down one of the most popular topics in the finance industry today: Decentralised Finance (DeFi).

After explaining what DeFi is, he discusses whether DeFi can ever truly challenge traditional finance as we know it.

This you can read or listen to on YouTube for just under 17 mins. 

The inherent risk in crypto-currency

oncerns around the vulnerabilities inherent in crypto-currencies are not new, with several countries implementing increasingly complex bans on them, including China, Bangladesh, Qatar, Nigeria, Egypt and Morocco. Others are considering increasingly rigorous controls over how these currencies are managed and accessed.

“The crypto-currency ecosystem is still very much the Wild West,” says Anna Collard, SVP content strategy & evangelist at KnowBe4 Africa. 

Read in conjunction with the YouTube video above. 3 min read

Old Mutual calls for low carbon SA benchmark

‘We need a net-zero benchmark in place that takes into consideration the unique composition of our local environment’

Old Mutual Investment Group (Omig) believes that South Africa needs to establish a ‘socially inclusive listed equity investment benchmark’. This is necessary to support the market’s transition to net zero in line with the country’s commitments under the Paris Agreement.

A clearly written article to add value to the discussion. 3 min read

Is Discovery testing the DFM waters?

DIscovery's Dynamic Asset Optimisers can play a similar role to a DFM for an adviser.

Discovery has not yet formally entered the DFM space. It is not an independent provider of advice, nor does it pretend to be. It is no accident that more than 80% of the assets on the Discovery Invest platform are invested into its own range of funds.

But the Dynamic Asset Optimiser funds of funds play a similar role to the DFM.

Perhaps there is nothing that is beyond Discovery's reach. What are your thoughts? 3 min read

Healthcare

NATIONAL HEALTH INSURANCE: MORE QUESTION THAN ANSWERS

That fact that universal healthcare is desperately needed in South Africa is not being debated. Having only around 16% of the population on private medical aid, with the rest relying on public health, is unsustainable,’ says Lee Callakoppen, Principal Officer of Bonitas Medical Fund.

‘What is worrying is the lack of detail around the implementation of this national health blueprint. Before discussing concerns about the implementation of NHI, we should discuss the ramifications of curtailing the role of medical aids.

Medical aids and associated services make an enormous contribution to the annual fiscus. The industry also contributes significantly to employment and, in turn, to the economy of the country. Healthcare administration is a massive undertaking that requires, skills, experience and expertise. State of the art technology is needed to comply with international best practices

Another MUST READ so that you can be aware of the full ramifications of the NHI not only the sentiment of serving a sought after human right for all. Page 55 in the COVER magazine for this month. 7 min read

Health department defends governance plan for NHI fund

But Section 27 says the governance proposals are the most problematic element of the NHI Bill

The health department has defended the governance structure for the National Health Insurance (NHI) fund proposed in draft legislation currently before parliament, despite the extensive critique levelled against it during recent public hearings.

Parliament’s portfolio committee on health is currently considering the NHI Bill, the first piece of enabling legislation for the government’s ambitions for universal health coverage. The government’s NHI policy proposes sweeping reforms that aim to ensure everyone can access healthcare services that are free at the point of delivery, and are based on social solidarity principles in which the rich subsidise the poor, the healthy and the sick...

This article is only available to subscribers to Business Live, but you may find that your institution has a library subscription. If not - there will be articles on this topic next week which will be free to read and you have enough info above to note that there are differences of opinion.  Was the chance to review simply a charade - never intended to be taken seriously? 

‘Test and treat’ is being used to tackle HIV. Why not TB?

Worldwide, tuberculosis (TB) remains a significant cause of disease and deaths. Around 9.9 million people had the disease in 2020. The burden is higher in low- and middle-income countries. Africa accounts for 25% of TB cases.

In the HIV care field, the current UNAIDS strategy is to “test and treat”. This approach involves widespread, community-based HIV testing. People testing positive for HIV are immediately placed on antiretroviral therapy.

This strategy has two key benefits: protection from HIV infected persons progressing to AIDS, and a lowered risk of infecting others. This, in turn, will decrease the global HIV burden, and lead to improved health of the infected persons and less transmission to the uninfected.

What if the global TB management community adopted a similar strategy?

Why not indeed, here is the first of a cluster of articles bringing TB into the spotlight. Do you think policy could change the status quo of TB? This article is a 4 min read. 

Like COVID, TB is a pandemic and must be treated as an emergency

In 1993, the World Health Organisation (WHO) declared tuberculosis (TB) a global public health emergency. It urged nations to coordinate efforts to avert millions of deaths.

In January 2020, the WHO declared COVID-19, another airborne infectious disease, a public health emergency of international concern.

The similarity between the global responses to these two pandemics ends there.

The second of the cluster of articles on TB. 4 min read available below. 

TB prevention has relied on the same vaccine for 100 years. It’s time for innovation

TB is one of the oldest infectious diseases in recorded history. Most of the people who are ill with TB live in low- and middle-income countries where this disease is one of the leading causes of death. This is particularly distressing given the fact that TB is preventable, treatable and curable. But there’s currently only one vaccine approved against TB. And it is 100 years old. The first dose of the Bacille Calmette-Guérin (BCG) vaccine was administered on July 18 1921. The Conversation Africa’s Ina Skosana poses key questions to Bavesh Kana, one of South Africa’s leading TB researchers.

The last article in this week's cluster covering TB and its prevention and cure. Available below in .pdf

About you

Six Things You Must Quit Doing Now To Be More Successful

Most of us grew up hearing the mantra “Don’t be a quitter,” and we’ve internalized it to the point where we feel guilty even if we don’t finish a book that’s boring us to death. Our parents weren’t entirely wrong in saying that persistence is necessary for success, but sometimes quitting is the most effective course of action. Whether it’s a failed project, a thankless job, or a doomed relationship, quitting can be a virtue.

“Quitting is leading too.” – Nelson Mandela

Be inspired by this article, we can change our minds and we can quit - 4 min read

Three reasons why you feel stressed when trying to relax – and what you can do about it

Have you ever tried to relax, only to find yourself overwhelmed with feeling stressed and having negative thoughts? Turns out a lot of us experience this – which is why some have coined it “stresslaxing”.

Even though stresslaxation is a new term, it describes relaxation-induced anxiety which has been studied for years. This is shown to happen to between 30% and 50% of people when they try to do relaxing things, causing symptoms of stress (such as rapid heart beat or sweating).

It’s paradoxical, given people who experience stresslaxation may need to do something relaxing to de-stress.

Have a read and then try some of the pointers that are given to help you overcome stresslaxation. 4 min read

Guilt: when it is useful – and what to do if it takes over your life

Many people feel guilty when watching horrific things happen to others on the news. It can also hit when we think about a time we broke someone’s heart, snapped at a child or deeply hurt a friend’s feelings. In fact, most of us feel guilt from time to time, and it can be a deeply unpleasant experience.

But why do we feel guilty so easily – what purpose does it serve? And what can we do if it becomes unbearable? Luckily, psychological research provides some answers.

We all need to do something rather than sit with a feeling a guilt. Hear some of the ways you can overcome these feelings. 3 min 30 sec read available below in .pdf