Podcast: Glimmers of hope from Davos

LISTEN:  AI, geopolitical risks, anaemic economic growth and climate change dominated talks at this year’s Davos meetings. in this episode of the No Ordinary Wednesday podcast Investec Bank SA CEO Richard Wainwright and Investec Group Finance Director Nishlan Samujh, who were at WEF in Switzerland, share their insights.

Key themes discussed in Davos included AI, geopolitical risks, anaemic global growth, and the potential of free trade in Africa. Conversations focused on rebuilding trust in leadership for stability and confidence.

“The deficit is between nations, driven by conflict, and in many cases, citizens have lost trust in political leaders,” says Richard Wainwright, Investec Bank South Africa CEO, who attended this year’s gathering, together with Investec Group Finance Director, Nishlan Samujh.

This sentiment, says Wainwright, captures the prevailing mood of scepticism and uncertainty, emphasising the need for renewed commitment to ethical and effective leadership.

Samujh echoes these views, highlighting the pivotal role of business leaders in this trust-building endeavour: "Citizens have lost faith in political leaders, but they often look to companies and their leaders for trust, direction, and hope." Both say this shift places a significant responsibility on corporate leaders to foster a sense of stability and direction for people seeking guidance in turbulent times.

Conflict threatens global growth

Despite lacklustre global growth, there are glimmers of hope. “India is emerging as a significant growth engine, while China is more domestically focused,” says Wainwright, who believes India’s growth potential is sustainable.

“Global growth is expected to be around 3%, but closer to home there are continuing difficulties faced by African nations in managing debt and attracting private capital for growth,” says Wainwright.

Escalating geopolitical tensions could further slow growth as global trade is impacted by events like current Red Sea crisis. “There are a lot of goods that go through the Suez Canal. If those reroute, there’s potentially downside inflation risk,” warns Wainwright.

AI: a force for good?

The uncertainty is further exacerbated by a big year for elections globally with more than 50 countries, including major economies, going to the polls.  This is stoking fears of the spread of misinformation using the rapid evolution of artificial intelligence.

While this was discussed at Davos, there was more of a focus on the potential of AI as a force for good: “The drive at the conference was that the real gain from AI is increasing productivity, and if you use it properly the story's not about the loss of jobs,” says Samujh.

“There will be a need to reengineer our approach to work. Predictive AI has automated high-frequency tasks with little processing change, while generative AI works alongside humans as partners.”

Africa rising?

Wainwright was encouraged by the international acknowledgement of the progress of the Africa continental free trade agreement. Centre stage was the launch of the Private Sector Action Plan, spearheaded by the World Economic Forum and the African Continental Free Trade Area (AfCFTA) Secretariat, and endorsed by some 40 global companies.

“There is a need for alignment of regulations and the establishment of common payment platforms for easier cross-border transactions in different currencies. African leaders recognise the importance of addressing these challenges and the private sector is willing to participate,” he says.

When it comes to our corner of the world, Wainwright believes our challenges are understood by the international investment community: “Most global investors and corporates understand our story and our history and I think it's fair to say now that the Mandela halo effect is long gone, the realities of our situation are factored in.”

Wainwright says he pleased by the progress that is being made in the bi-monthly meetings with President Ramaphosa and senior business leaders to address challenges in energy, transport and logistics, crime and corruption. However, he believes it’s time for delivery: “Until we get business confidence to improve domestically, and we start seeing corporate South Africa investing in new capacity, we won't get the international investment.”