Gerrie Fourie shares frank views on economic growth, industry competition, and his next chapter.
Rather than considering a narrower inflation target for South Africa, greater emphasis should be placed on maintaining an acceptable gap between real interest rates and inflation, one that encourages economic growth.
Outgoing Capitec CEO Gerrie Fourie expressed this view on Tuesday, saying interest rates should actively support the economy.
“For me, a better way to look at inflation targeting is to ask if the gap between the real interest rate and inflation is big or small. What is the real cost of interest, and what should that be?”
Fourie, who retires in a few weeks, made the comments during a roundtable discussion with journalists.
His comments come as the South African Reserve Bank (Sarb) intensifies efforts to shift the country’s 3-6% inflation target range to a narrower 3% level.
Analysts and economists are divided on the inflation target. Some argue that the current low inflation environment presents a window to reset inflation expectations without significantly undermining growth.
Others say South Africa’s real interest rates remain too high and should be reduced to stimulate economic growth.
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Growth should be the only priority
Fourie believes South Africa should have one, single aim – economic growth.
“If you have one objective and your entire team focuses on that, you deliver. But if you have 10 objectives, you do things [by] half.”
He stands by his recent comments suggesting unemployment in the country may be overstated and that it is closer to 10% compared to Statistics SA’s official unemployment rate of 32.9% in the first quarter of 2025.
“I maintain that our employment rate is much lower,” he says, pointing to South Africa’s vast informal sector, which he believes is underestimated and underdeveloped.
While the comment drew criticism, Fourie says it has triggered “positive exchanges”.
“I had six ministers who have reached out to me, and I’m having meetings with them. It’s all about how we unlock potential and how we get the country growing.”
Fourie emphasises the need to support informal businesses, citing Mexico as a model: “In Mexico – they know their informal market’s size is 55% and they have real strategies to grow and support the sector.
“In South Africa, we need to better understand the informal sector. Yes, everyone knows it’s a massive market, but how do we grow it so we can solve our problems?”
Fourie insists that unemployment will not be solved by the formal sector and government. “We’ve been trying that for the last 20 years and nothing is happening.
“Capitec started with basically no people. And today we employ 17 000 people. We need to foster entrepreneurship and make sure our policies encourage entrepreneurs to grow their businesses and employ more people. Then we will unlock potential in South Africa.”
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Appointing the ‘right’ people
Reflecting on his 12 years as Capitec CEO, Fourie credits the company’s growth and success to employing the right people and building a culture centred on accountability.
“We have an obsession with bringing in the right people. It’s a critical part of our success.”
Capitec’s recruitment model includes psychometric testing to ensure cultural fit, especially at branch level where consultants are drawn from the communities they serve.
“At head office, our mid- to senior managers should have nine leadership traits that are specific to Capitec, like thinking long-term, seeing the bigger picture, and being client-centric.”
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The darkest day
Fourie describes the Viceroy Research report that was released on 30 January 2018 as his most difficult time as CEO.
The report – titled Capitec: A Wolf in Sheep’s Clothing – accused the bank of engaging in predatory lending practices and called for regulatory intervention
“That was probably the darkest day. It was an attack on our integrity, implying we are dishonest.”
The saga tested the bank’s leadership and character – but its stakeholders “could see how we reacted and how serious we were”.
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The ‘crowded’ banking space
On competition in the financial services sector, Fourie acknowledges that banking today is vastly different from when Capitec launched in 2001.
“Twenty years ago, banking was just banking. There were five, six players in the industry. The financial services world has changed completely – even if you look at Capitec. A big portion of our income stream is from VAS [value-added services], insurance, and digital products.”
Fourie is not worried about the banking sector becoming “too crowded” in South Africa.
“What is important is that we are all on the same playing field from a regulatory point of view. That will be the challenge.”
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Home Affairs fee hike
Responding to criticism from digital rival TymeBank over the Department of Home Affairs’s proposed fee increases for ID verification, Fourie says it is better if the private sector pays a market-related fee for the services rendered by Home Affairs so that the department can invest in systems and make sure South Africans get the services they deserve.
TymeBank co-founder Coen Jonker recently criticised the department for its proposal to increase fees by “6 500%” (from the current 15c to approximately R10), saying it will make it commercially unviable to serve low-income South Africans, such as social grant recipients and informal workers.
Fourie however says the current 15c is “completely out of line” with information-related services. “You can’t ask a non-market-related fee and then the taxpayer must foot the bill.”
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The next chapter
Fourie, who turns 62 later this year, says he could have stayed on at Capitec until age 65, which is the official retirement age at the group.
“In October I would’ve been CEO for 12 years. You are under a lot of pressure and scrutiny, and you need to set the pace – at 130%, not at 80%. You can’t run at that full pace forever. I have other interests that I want to focus on.”
Fourie will remain with Capitec for at least another year in a non-executive role, coaching executives and working on the bank’s international strategy.
“Capitec is in my DNA – I’ll always be a part of the bank.”
His global focus includes defining what Capitec’s international expansion will look like. “Are we going to be a bank, or a fintech company, or a remittance company? It’s to define what that strategy should look like and what we’re going to do.”
Outside of banking, Fourie plans to devote time to personal interests – including conservation. He owns a one-third stake in the Gondwana Game Reserve near Mossel Bay. “So there’s the running and development of it and working in conservation.”
He also plans to support small businesses and spend more time between his two homes in Stellenbosch and Hermanus.
Fourie will be succeeded by Graham Lee, currently heading the lender’s retail unit, who will take over on 19 July.
This article was republished from Moneyweb. Read the original here.
