African Financial Group by CMB Media Group

AFRICAN FINANCIAL GROUP

Successfully Delivering Quality Healthcare

for â&#x20AC;&#x2DC;Missing Middleâ&#x20AC;&#x2122; PRODUCTION: Manelesi Dumasi

Now is a very exciting and important time for diversified financial services and healthcare business, African Financial Group. Growing on the continent and in the Middle East, listing on the ZAR X, and expanding into new service areas with local partners, Dr Gil Mahlati is a busy man. www.enterprise-africa.net / 3

INDUSTRY FOCUS: FINANCE

12 months since Dr Gil Mahlati told Enterprise Africa of his ambition to help transform the South African economy by ‘using money generated by black people instead of established money’ to drive an investment strategy focussed around healthcare, he is now happy to share that the plan is reaching fruition. His company, African Financial Group - a pioneering transformational investment and financial services company – is helping to build hospitals and healthcare facilities around the continent and helping to deliver quality, affordable healthcare where it is needed. Dr Mahlati, a Fellow of College of Surgeons of SA from the University

// WE ARE NOW GETTING CONTRACTS IN THE UNITED ARAB EMIRATES AND WE ARE DISCUSSING BUILDING HOSPITALS IN DUBAI //

Dr. Gil Mahlati

4 / www.enterprise-africa.net

of Cape Town (1994) and a Clinical Fellow in liver surgery from King’s College Hospital in London, is one of the country’s most trusted figures in the healthcare industry. He has a long history in finance and economic empowerment, and is now partnering with other local investment organisations to advance plans for delivery of healthcare to the so-called ‘missing middle’. “There’s a whole section of our economy, known as the ‘missing middle’, including police, teachers and others in the lower-middle class, that don’t have access to proper private healthcare and proper private housing funding so we are concentrating on that area in South Africa which is around 15 million people,” he told Enterprise Africa in 2017. Asked about progress in this area, Mahlati reports positively. “It’s going very well,” he says. “We have the support of a local private equity fund called Razorite Healthcare Fund (RH Managers) and we are getting pan-African support from Oppenheimer Partners. “We are part of a joint venture with Austrian healthcare company, VAMED, and they have established an

office in Johannesburg which helps to globalise our healthcare offering. We are now getting contracts in the United Arab Emirates and we are discussing building hospitals in Dubai. We are the financial partner to Sakhiwo – the healthcare infrastructure solutions company. We arrange the capital for Sakhiwo not only on the continent but also in Dubai and elsewhere.” ZAR X LISTING Global exposure has helped spur AFG towards a local listing and, in the near future, the company will be traded on the new bourse, ZAR X. Established in 2016 by CEO Etienne Nel, the ZAR X is a licensed stock exchange that uses disruptive fintech to create a more efficient market for all. “The ZAR X will list all black empowerment shares that are derived from listed companies on the JSE. We have created securitisation structures to list on the ZAR X and that will happen at the end of Q1. It will help to bring more capital into transformational investments which are trying to help rebalance the ownership of the economy. We are working closely with ZAR X, and we have been for the past few years, to make it possible for us to list. It has taken a lot of intellectual capital – legal, tax, financial – to do what we are doing,” states Mahlati. The last year has seen African Financial Group grow revenue significantly and expand its geographic reach to bring innovative financing and healthcare solutions to more African nations. Previously, Mahlati stated he wanted to reach $1 billion turnover. “We are almost there,” he says. “At Sakhiwo, in South Africa alone, we have new hospitals that we are building that amount to around R7 billion in turnover. If we look at the size of the projects in Dubai, which we have not concluded yet, they are around $200 million per hospital and we are looking at four hospitals. We have also just started discussions with the government of South Sudan on

AFRICAN FINANCIAL GROUP

// IT WILL HELP TO BRING MORE CAPITAL INTO TRANSFORMATIONAL INVESTMENTS WHICH ARE TRYING TO HELP REBALANCE THE OWNERSHIP OF THE ECONOMY // the $500 million roll out of healthcare infrastructure. So, we are on target to deliver $1 billion turnover on the healthcare infrastructure side. On the financial services side, with the listings, in terms of assets under management, our target is R10 billion in two years.

What is helping us is that some of the policy positions of our government, which encourage the redistribution of wealth and getting emerging companies to participate in South Africa. In the rest of Africa, there is a lot of interest in the continent as a source of growth from both East and West.” He highlights private hospital projects across various African countries as brilliant examples of how the healthcare industry is modernising and expanding to come up with solutions to new challenges. “We have a project in Zambia, with the local pension fund, to build a university hospital and we are also looking at other financial service opportunities. We have another project in Ghana to build a private university hospital. We also have a project in Cameroon to build a

private hospital and a pharmaceutical distribution centre.” Faced with political and economic challenges, Africa – like any world geography – must jump hurdles to develop sound investment strategies. But the nature of the healthcare industry makes it somewhat insulated from economic and political turmoil and Mahlati is happy to see private and public organisations coming together around Africa to achieve success. “Healthcare is resilient when it comes to downturns - you can’t postpone your pain. The policy shift across the continent towards universal coverage in most countries - including Kenya, Zambia, South Africa – and the policy shift towards welcoming private sector involvement have combined to help with what we want to achieve,” he says.

LE T’S BUIL D HE ALTH w w w. s a k h i w o . c o m mail@sakhiwo.com

WE BELIEVE IN THE POWERFUL IMPACT OF WORLD-CLASS HEALTHCARE.

WE SPECIALISE in strategic health planning, health briefs, facility planning, architectural design, project and construction management, health technology, consultancy and advisory services related to hospital infrastructure development, commissioning and health facility maintenance management.

Current projects SOUTH AFRICA • Cecilia Makiwane Hospital • Lilitha College of Nursing • Frere Hospital (Oncology, ICU) • Sipetu District Hospital • Thabazimbi District Hospital • Letaba Regional Hospital • Limpopo Academic Hospital • Siloam Hospital • Eastern Cape Health Facilities Maintenance ZIMBABWE • The Avenues Woman and Child Hospital

MOZAMBIQUE • Nampula General Hospital GAMBIA • Horizons Private Clinic (TA for AfDB) NAMIBIA • Otjiwarongo Referral Hospital • Ondangwa District Hospital • Khomas District Hospital • Katutura Hospital • Windhoek Central Hospital BOTSWANA • Health Facilities Maintenance

SAKHIWO – Leaders in Health Infrastructure Development.

SAKHIWO acts as an implementing and multidisciplinary development agency for hospitals and health facilities and operates both in Southern Africa as well as the rest of the African continent.

www.enterprise-africa.net / 5

INDUSTRY FOCUS: FINANCE

NHI South Africa’s long-awaited National Health Insurance bill is set to be finalised in the coming weeks and months and the premise – to give all South Africans access to quality healthcare regardless of their socioeconomic status or ability to pay – is one which Dr Mahlati supports. But in December, the bill was rejected by parliament and the Department of Health has had to rework the idea which has given African Financial Group time to prepare and plan for what this new system might look like. “We are happy as we are honing our skills in terms of how we deliver this cost-effective healthcare, and it is giving us time to continue with our pilots in terms of reinvestment methodologies and contractual arrangements. We are now getting more partners and we are working with the government medical aid scheme in order to deliver this cost-effective healthcare,” says Mahlati.

6 / www.enterprise-africa.net

“We are expecting the announcement as part of the SONA and it will be pushed through – it’s only technicalities that are holding it up, surrounding how the Department of Health will work with the Treasury – it’s all inter-governmental issues. Treasury gets a lot of tax from medical aid and people who fund their own healthcare and there are technicalities in terms of how that will be treated. Treasury doesn’t want that inflow to diminish but at the same time the Department of Health wants to have control of that type of cash for NHI. There’s also a constitutional technicality. Constitutionally, healthcare is delivered by government at provincial level and not at national level so NHI would require constitutional changes to be implemented.” While addressing ANC supporters at the party’s election manifesto launch in Durban last month, President Ramaphosa said that the government remains committed to the implementation of NHI.

// HEALTHCARE IS RESILIENT WHEN IT COMES TO DOWNTURNS - YOU CAN’T POSTPONE YOUR PAIN // “The NHI is a chance for South Africans to contribute to the collective health and well-being of one another and extend access to quality healthcare to everyone. “We are fully aware that the journey to universal health care has to start with deliberate efforts to address the immediate crisis in the public health system to tackle such issues as corruption, poor management of financial resources, human resource planning, training, budgeting, maintenance and upgrading of equipment and infrastructure,” he said.

AFRICAN FINANCIAL GROUP

FAMILY BUSINESS Dr Gil Mahlati started AFG alongside his wife – Dr Vuyo Mahlati, a financial services expert who has been a driving force behind South Africa’s NDP. Now, almost two decades into business, African Financial Group has welcomed the next generation of Mahlati’s to the company. Lilitha Mahlati - who holds a Master of International Business from Hult International Business School in Shanghai and a Business Science Finance Honours degree from University of Cape Town - is now the company’s Investments Director and Gil Mahlati is enjoying working with his daughter. “It has been very helpful” he says, “especially when working with Sakhiwo as she is an infrastructure finance person and her skills are required for exactly what we are doing together. There is also an issue in South Africa with female empowerment – it’s very topical. Even if you are a black-owned company, you

tend to score higher if you have female Directors. One of our global partners, Castle Pines, has decided to invest in her and her team so that she can complete new deals and transactions. Right now, they are discussing relationships so that investments can move forward.” Looking at other opportunities, away from its health and financial services offerings, AFG has been utilising presence at popular exhibitions to get involved in exciting new projects that can be scaled around the continent. “There have been two investment conferences recently, one organised by SA and one focussed on the continent, and this has given us a lot of firepower and a lot of pan-African projects to work on. For example, we are now looking at the development of smart cities with a company based in Cape Town. They are looking at the development of a new city on the northern side of Cape Town over the next 20 years, which will absorb most

of the informal settlements from the Cape Town area. We plan to export this idea around Africa and we have interest from Mauritius, Zambia and Nigeria, and the project has the support of Castle Pines so we are in discussions about how we can fund it. There will be more to come on that in 2020 as the idea remains in development.” Times are certainly thrilling for AFG, and with all that remains to be done on both the healthcare side of the business and the financial services side, this is a company which remains committed to its vision and is realising significant opportunities for Africa.

WWW.AFRICANFINANCIALGROUP.COM

www.enterprise-africa.net / 7

Published by CMB Media Group Chris Bolderstone â&#x20AC;&#x201C; General Manager E. chris@cmb-media.co.uk Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. ÂŠ CMB Media Group Ltd 2019

AS FEAT UR ED IN

ENTERPRISE AFRICA

FEBR UAR Y 2019