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SA's brain drain: 'Critical for economic recovery to stem the emigration tide'

10 February 2021 7:17 PM

From medicine to construction - specialist skills must be retained for SA to remain competitive, warns RMB chief James Formby.

In the Fourth Industrial Revolution, for South Africa to remain competitive, it's absolutely critical that we attract and retain specialist skills.

James Formby, CEO - Rand Merchant Bank

We have to ensure that the emigration and accompanying brain drain "trickle" the country is experiencing does not turn into a torrent, warns James Formby.

© Surasak Saneha/123rf.com 

Bruce Whitfield interviews the Rand Merchant Bank boss on The Money Show.

He acknowledges that hard data is not really available, but says the estimated number of South Africans leaving is something the country can ill afford.

We've tried, but the only way you can actually do it is to look at South Africans that are living in other countries and try and piece it together over long-term numbers.

James Formby, CEO - Rand Merchant Bank

The best estimate is around 23,000 people leaving per year, but anecdotal evidence is showing it is higher.

James Formby, CEO - Rand Merchant Bank

South Africans tend to move not necessarily because they feel opportunity is better elsewhere - it's just that they're terrified of what's happening in their own backyard...

Bruce Whitfield, The Money Show host

It's a tragic situation says Whitfield, that so many South Africans are losing faith in the future.

Formby cites load shedding, along with safety and security, as the perennial concerns driving emigration.

He says the country has to be very cautious of some of the other "own goals" that could be avoided.

For example the SA Medical Association did research on medical specialists... and 38% of them said they would leave if NHI was fully implemented.

James Formby, CEO - Rand Merchant Bank

That uncertainty isn't the kind of uncertainty you want for those specialist skills because it takes years to develop and they need to train, in turn, the people that come after them.

James Formby, CEO - Rand Merchant Bank

Formby discusses examples of other sectors losing specialist skills like the construction industry with civil engineers.

In the last few years we've seen 1.7% of civil engineers leave, which is not surprising given the economic environment. If we want an infrastructure-led recovery in this economy it's critical to make sure that we stem that tide.

James Formby, CEO - Rand Merchant Bank

Formby also comments on the "how can we find the money to pay for vaccines" discussion.

He agrees with other economists that a vaccine rollout could be funded through the current tax collection overrun, without the need to actually increase taxes.

To put it into context, the whole vaccine programme is around 24 days' worth of our interest bill!

James Formby, CEO - Rand Merchant Bank

What business needs to hear from President Cyril Ramaphosa during his upcoming Sona address is how government is executing the plans it's already announced, he says.

Listen to the conversation on The Money Show:




10 February 2021 7:17 PM

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