Francois Gouws, CEO of PSG Financial Services, has expressed concerns about the National Health Insurance (NHI) and its potential impact on South Africa’s economic reform efforts. After the company released its latest financial results, Gouws highlighted the uncertainty surrounding the NHI, which he called “the elephant in the room” for economic reform.
Gouws emphasised that the lack of clarity around the funding and costs associated with the NHI is a significant concern. He said it had not been costed, and no funding forecast had been made.
The NHI is being advanced despite South Africa’s significant budget deficit and rising government debt, which are creating additional pressure on the already strained economy.
Cautious optimism amidst economic uncertainty
Gouws pointed out that the market had responded positively to the formation of the Government of National Unity (GNU) following the recent national elections. This could reflect cautious optimism about potential improvements in consumer and business confidence.
However, Gouws cautioned that this optimism could be short-lived unless the government prioritises sustainable economic growth and sends clear signals through policy reform.
Call for business-friendly policies and thorough impact studies
Gouws underscored the need for a legislative agenda fostering economic growth, stressing that comprehensive social and economic impact studies must support reforms. This would allow for a practical discussion with various stakeholders on the financial implications of policies like the NHI.
Despite concerns over the broader economy, PSG Financial Services reported strong interim results. For the six months ending in August, the group saw a 280% increase in recurring headline earnings per share and an impressive return on equity of 26.2%. These results reflect the company’s resilience in challenging economic conditions.