Southern Africa regional superpower in the making Dr Roelof Botha
Health sector focus
Composition of Gauteng health budget FY 01 by programme (total R5. billion) R b Central Hospitals: 6.5 Facilities Management:. Admin & support: 1 Training/R & D: 1 District health: 7 Provincial Hospitals: 5 Emergency services: 0.7
Economic classification of Gauteng health budget FY 01 (total R5. billion) R b Capex: 1.6 Salaries: 1.9 Goods & services: 7. Transfers:.5
Health expenditure propensity households & government 10 % Government 9 8 Households 7 6 5 '9 '9 '95 '96 '97 '98 '99 '00 '01 '0 '0 '0 '05 '06 '07 '08 '09 '10
Per capita health expenditure 009 top-1 SSA economies South Africa Angola Nigeria Cameroon Senegal Ivory Coast Zambia Ghana Uganda Kenya Tanzania Ethiopia $ 0 100 00 00 00 500
Per capita health expenditure 009 selected SADC countries Botswana South Africa Mauritius Namibia Angola Swaziland Lesotho Zambia Tanzania Mozambique Malawi DR Congo $ 0 100 00 00 00 500 600
Per capita health expenditure 009 top-1 emerging markets Poland Brazil Argentina Saudi Arabia Turkey Mexico South Africa Russia China Thailand Indonesia India $ 0 100 00 00 00 500 600 700 800
Per capita health expenditure 009 top-1 high-income economies United States Switzerland Netherlands France Germany Canada Australia Italy Japan United Kingdom Spain South Korea $ 1,000,000,000,000 5,000 6,000 7,000
Life expectancy at birth 009 - top-1 SSA economies Ivory Coast Ghana Tanzania Senegal Ethiopia Kenya Uganda South Africa Cameroon Nigeria Angola Zambia Years 0 5 50 55 60
Life expectancy at birth 009 selected SADC countries Mauritius Namibia Tanzania Botswana Malawi South Africa Mozambique DR Congo Angola Zambia Swaziland Lesotho Years 0 5 50 55 60 65 70 75
Life expectancy at birth 009 top-1 emerging markets Poland Argentina Mexico Saudi Arabia China Brazil Turkey Indonesia Thailand Russia India South Africa Years 50 55 60 65 70 75
Life expectancy at birth 009 top-1 high-income economies Japan Switzerland Spain Australia Netherlands Italy France Canada United Kingdom Germany United States South Korea Years 65 70 75 80 85
Access to sanitation 009 (% of population) top-1 SSA economies South Africa Angola Senegal Zambia Uganda Cameroon Nigeria Kenya Tanzania Ivory Coast Ghana Ethiopia % 0 0 0 60 80
Access to sanitation 009 (% of population) selected SADC countries Mauritius South Africa Botswana Angola Malawi Swaziland Zambia Namibia Lesotho Tanzania DR Congo Mozambique % 0 0 0 60 80 100
Access to sanitation 009 (% of population) top-1 emerging markets Thailand Saudi Arabia Turkey Poland Argentina Russia Mexico Brazil South Africa China Indonesia India % 0 0 60 80 100
Average annual growth in per capita health expenditure since 006 - top-1 emerging markets China Argentina Brazil Thailand Indonesia Poland India Turkey Russia Saudi Arabia South Africa Mexico % 0 6 8 10 1 1 16
The Southern African economy Impact of recession on Prospects for the economy some sustained growth sectors lagging
Volume of manufacturing output (seasonally adjusted) (index, 005 = 100) 115 Index 110 105 100 95 90 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11
Gauteng business barometer by sector % annualised change to March 11 (Sake & BoE Private Clients) Govt. & other services Transport & comm. Overall barometer Wholesale & retail trade Finance & bus. services Mining % Manufacturing Electricity & water Construction -0-10 0 10 0
Manufacturing worst 10 performers between 005 and Q1 011 (% change in output) Motor vehicles Rubber % Petroleum Furniture Wood products Non-metallic min. Publishing Clothing Machinery Textiles -5-0 -15-10 -5 0 5
Manufacturing best 10 performers between 005 and Q1 011 (% increase in output) Plastics Electrical machinery Chemicals Beverages Glass Paper % Metal products Vehicle parts Food Total 0 5 10 15 0 5 0 5
Real $/rand exchange rate & the balance on the current account 0.17 $ -5 0.16-15 0.15 0.1-5 0.1-5 0.1-5 0.11 Rb 0.1-55 Q1'0 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11 Exchange rate Current account
Real $/rand exchange rate & the rand gold price 0.17 0.16 0.15 0.1 0.1 0.1 $ 10000 9000 8000 7000 6000 5000 000 0.11 R 000 0.1 000 Q1'0 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11 Exchange rate Gold price
Long-term bond yields US & South Africa 16 % 1 1 South Africa 10 8 6 US '96 '98 '00 '0 '0 '06 '08 '10
Average annual change in real R/US$ exchange rate during key phases of currency volatility (chronological) 1980 to 198 198 to 1985 1985 to 199 199 to 1997 % 1997 to 00 00 to 005 005 to 008 008 to 011 1980 to 011-15 0 15 0
Reversal of convergence of the big tax revenue sources burden returns to individuals 6 % of total Individuals 8 VAT 0 Companies 1 '90 '9 '9 '96 '98 '00 '0 '0 '06 '08 '10
Fiscal deficits as % of GDP selected trading partners US UK Greece Japan France South Africa India Turkey Russia Brazil China Germany % 0 6 8 10
Total corporate tax rates selected high-income countries & emerging markets (Source: World Bank/IFC/PwC) Brazil China Germany Australia US Russia Turkey UK South Africa South Korea Chile % 10 0 0 0 50 60 70
Budget deficit/gdp ratio (with National Treasury forecast to 01) 0 % '00 '01 '0 '0 '0 '05 '06 '07 '08 '09 '10 '11 '1 '1 '1 - - -6-8 -10
Degree of concern amongst CEOs over government response to fiscal deficit (Source: PwC Global CEO Survey) 60 % 50 0 0 SA Global 0 10 0 None Not significant Somewhat Extremely
SA banks - ratio of credit impairments to total assets.5 % 1.5 1 0.5 0 '9 '9 '9 '95 '96 '97 '98 '99 '00 '01 '0 '0 '0 '05 '06 '07 '08 '09 '10
Quarterly % change in mortgage advances outstanding 7 6 % 5 1 0 Q'06 Q1'07 Q1'08 Q1'09 Q1'10
Absa average house price (medium-sized, nominal, at end of quarter) R 000 960 90 90 900 Q1'08 Q1'09 Q1'10 Q1'11
Total credit extension by all financial institutions..1 R trillion 1.9 1.8 1.7 1.6 1.5 Q'06 Q1'08 Q1'09 Q1'10 Q1'11
Bloom time for emerging markets & SADC The recession is over prepare for higher growth Dr Roelof Botha Dr Roelof Botha
Sharp contrast between the GDP growth paths of Zambia and Zimbabwe (nationalisation in action) 1 $ billion Zambia 9 6 Zimbabwe 0 '9 '95 '96 '97 '98 '99 '00 '01 '0 '0 '0 '05 '06 '07 '08
Economic growth expected to consolidate in highincome countries & Russia (Source: World Bank) % real GDP growth 0 - Euro Area Japan US Russia 008 009 010 011 - -6-8
Key developing regions exhibit resistance to recession & set to grow at high rates (Source: World Bank) 10 % real GDP growth 8 6 008 009 010 011 0 Brazil Africa India China -
China & India ignore the recession % real GDP growth 1 China 9 India 6 '96 '97 '98 '99 '00 '01 '0 '0 '0 '05 '06 '07 '08 '09 '10
Emerging markets top-ten economies (total $1. trillion) China Brazil Russia India Mexico Turkey $bn Indonesia Poland Saudi Arabia South Africa 0 750 1500 50 000 750 500 550
Emerging markets 1 st tier group: per capita GDP 010 Czech Rep Taiwan Hungary Poland Russia Brazil Mexico South Africa $ China India 0,500 5,000 7,500 10,000 1,500 15,000 17,500
SA population trends & forecast (Sources: Stats SA, UNDP & post-005 extrapolation) 70 60 Million 50 0 0 0 10 0 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '0 '5 '0
SADC population forecast to reach 0 million by 00 50 Million 00 50 00 150 100 1980 1985 1990 1995 000 005 010 015 00 Source: UNDP
Most populous developing countries & SADC population China India SADC Indonesia Brazil Pakistan Bangladesh Nigeria Russia Mexico Philippines Viet Nam Million 0 50 500 750 1000 150
SADC share of world reserves for selected metals & minerals (009) Chrome ore Platinum Manganese Diamonds Gold Cobalt Vanadium Zircon Titanium Uranium Copper Coal % 0 0 0 60 80 100
Economic recovery: U-shaped or V-shaped?
Volume of production non-durables 115 Index (005= 100) 110 105 100 Q1/07 Q1/08 Q1/09 Q1/10 Q1'11
Recession only lasts quarters 7 Real annualised GDP growth (%) Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11 - -8
Electric current generated in South Africa (index, 005 = 100) 107.5 Index 105 10.5 100 97.5 95 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11
Household consumption expenditure at constant 005 prices durables & semi-durables 10 10 R bn (annualised) Semi-durable 10 110 100 Durable 90 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11
Change in inventories (constant 005 prices) 0 R bn 0 10 0-10 '9 '95 '96 '97 '98 '99 '00 '01 '0 '0 '0 '05 '06 '07 '08 '09 '10-0 -0-0
Sharp recovery of the leading business cycle in the US 10 Index, 000 = 100 17 1 11 /'06 /'06 1/'07 /'07 /'07 /'07 1/'08 /'08 /'08 /'08 1/'09 /'09 /'09 /'09 1/'10 /'10 /'10 /'10 118 115 11
South Africa s leading business cycle indicator 15 10 Index, 000 = 100 15 10 115 110 105 100 Q'06 Q1'07 Q1'08 Q1'09 Q1'10
Recovery of World Bank commodity price index for raw materials (000 = 100) 00 Index 50 00 150 100 Q'07 Q1'08 Q1'09 Q1'10 Q1'11
Recovery of World Bank commodity price index for metals & minerals (000 = 100) 00 Index 50 00 50 00 150 Q'07 Q1'08 Q1'09 Q1'10 Q1'11
Real retail trade sales (index, 008 = 100) 105 Index 100 95 90 Q'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11
Number of new vehicles sold (index, 000 = 100) 0 00 Index 180 160 10 10 100 Q'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11
JSE all share index ( 000).5 Index 0 7.5 5.5 0 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11
Conclusion - Convergence of structural & cyclical trends The recession is over prepare for higher growth Dr Roelof Botha
Total employment in SA (Source: Stats SA Quarterly Labour Force Survey) 1000 000 1750 1500 150 1000 1750 Q'08 Q1'09 Q1'10 Q1'11
Real non-agricultural output growth by sector 1st quarter 011 (annualised) Mining Manufacturing Trade & catering Transport & comm. Total Other services % Government Finance & bus. Services Electricity & water Construction 0 1
Overall business barometer four largest Provinces Source: Sake/BOE Private Clients 10 Index (005 = 100) 110 100 March'09 March'10 March'11 90 80 Gauteng KwaZulu/Natal Western Cape Eastern Cape
Progress with meeting basic needs.9 million houses 1000 new health clinics Access to clean water for 10 million people New sanitation facilities for 7 million people.5 million new electricity connections Free education Redistribution of million hectares of land Primary School Nutrition Programme for 5 million children 1 million new social grant beneficiaries (BIG?)
Remarkable metal commodity price recovery the leaders (% increase - 009 low to nd quarter 011) Silver Tin Copper Nickel WB metals index Lead Platinum % Aluminum Zinc Gold 50 100 150 00 50
Growth in tourist arrivals from selected regions June 009 to June 010 50 Number ( 000) 0 0 0 June '09 June '10 10 0 Australia & Middle East Asia Central & South America North America
Consumer & producer price trends 9 6 % PPI CPI 0 - Aug'09 Oct Dec Feb'10 April June Aug Oct Dec Feb'11 April -6
The prime overdraft rate peaks & troughs since democracy 5 % 0 15 10 5 Apr '9 May'96 Mar '98 Aug '98 Sep '01 Sep '0 Apr '05 Jun '08 Jan '11
Capital expenditure by SA Government as % of GDP returns to growth mode 8 % 6 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10
Private sector capital expenditure continues to anticipate a rise in demand % 11 9 7 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10
Medium-term growth prospects buoyed by rise in capital formation/gdp ratio % 0 18 16 1 9 95 96 97 98 99 '00 '01 '0 '0 '0 '05 '06 '07 '08 '09
Real GDP forecast to return swiftly to pre-recession growth trajectory 6 5 % 1 0-1 95 96 97 98 99 '00 '01 '0 '0 '0 '05 '06 '07 '08 '09 '10 '11 -
New record high for real disposable income per capita of households (at constant 010 prices) R 000 0 8 6 '90 '9 '9 '96 '98 '00 '0 '0 '06 '08 '10 Q1'11
% of CEOs that regard the following selection of potential business threats as their most significant risk (Source: PwC) 60 % 50 0 0 SA Global 0 10 0 Skills Energy costs Shift in demand Tax burden Supply chain security
Key drivers of future healthcare sector activity Provision of clean water & sanitation Improvements to education system NHI likely to benefit generic pharmaceuticals SA population to reach 57 million in 00 SADC population to reach 0 million in 00 Sustained economic growth million new jobs by 00 Further structural increase in per capita income Broadening of the tax base