RMB boss: push on with reforms

• Spectrum allocation tops Formby’s wish list, then logistics focus to exploit commodity boom

James Formby, the CEO of the country’s largest investment bank, Rand Merchant Bank (RMB), has encouraged the government to carry on making the difficult decisions that will remove structural impediments to growing the economy and tackling unemployment.

PERHAPS THE ANSWER SHOULD BE TO BUILD CENTRES OF EXCELLENCE TO REACQUIRE SKILLS THAT HAVE BEEN LOST OVER YEARS

James Formby CEO of Rand Merchant Bank

The CEO of the country ’ s largest investment bank, Rand Merchant Bank (RMB), has encouraged the government to carry on making the difficult decisions that will remove structural impediments to growing the economy and tackling unemployment.

James Formby, CEO of RMB, was speaking on the sidelines of an investment conference a week after the government announced measures to partially privatise national airline SAA and allow companies to generate up to 100MW of power.

The announcements brought about a tangible improvement in the national mood, Formby said.

“It’s a really good time to use this momentum to grasp the nettle of our other key challenges and change SA’s growth trajectory,” Formby said before laying out a “wish list” of other reforms he believes will grow the economy.

Topping the list would be the resolution of the allocation of spectrum that is the subject of litigation by various stakeholders in the ICT industry. The communications regulator, the Independent Communications Authority of SA (Icasa), planned to complete a major auction of spectrum — the critical element in creating capacity to transport information — in March. But several court cases involving the likes of Telkom and MTN have delayed the process.

Formby believes it would be constructive to try to get all parties to flesh things out around a table rather than in a courtroom.

“I can see why it is so important to the telcos because it sets up the industry for the next 15 to 20 years. But it is important to have a roundtable discussion to try to resolve the issues around spectrum so that we can move forward on this important issue,” Formby said.

In light of SA’s relatively poor ranking with regard to the efficiency of its ports — Transnet’s Cape Town port ranked 347th out of 351 in a survey conducted by the World Bank in 2020 — Formby believes a renewed policy focus on logistics will be particularly prudent given that the country could be in the middle of a multiyear commodity boom.

“At the moment, we are hamstrung by bottlenecks in rail transport and resultant overreliance on road transport, so there is a way to go there that could include greater participation of the private sector in the country’s port and rail network,” Formby said.

In the longer term, serious thought needs to be given to reviving the capabilities of numerous municipal administrations where a complete lack of skills and expertise has eroded the ability to provide services, as highlighted by Clover’s recent decision to close its cheese factory in Lichtenburg, North West.

“SA is not seeing the progress we would like in the municipal environment. Certain municipalities, particularly rural ones, can’t offer the services that are required.

“Perhaps the answer should be to build centres of excellence to reacquire the skills that have been lost over the years,” Formby said.