Robust strategic decision-making requires careful consideration of which trade-offs to pursue and which to avoid, particularly when these decisions may negatively impact certain stakeholder groups while creating long-term value for others.
AfroCentric’s strategic decisions are assessed through the lens of the six capitals, with an emphasis on their impact on long-term value creation. In 2025, the operating environment required the Group to make several difficult but necessary decisions to stabilise the business following contract losses and changing market conditions.
While some decisions reduced short-term profitability or required structural adjustments, they were made to preserve the Group’s long-term sustainability and its ability to deliver affordable, high-quality healthcare.
Balancing short-term resilience with long‑term strategic direction remains central to AfroCentric’s decision-making.
1. Stabilising the business while restructuring the operating model
Analysing the trade-off
The outcome of the Bonitas procurement process represents a significant shift in AfroCentric’s operating environment and requires a reassessment of the Group’s operating model. While the process remains subject to ongoing regulatory and legal developments, the Group has prudently begun preparing for a potential change in the scale of services provided to Bonitas. Following the announcement of Bonitas’ request for proposals in 2025, the Board undertook a series of deliberate and structured strategic assessments to evaluate the appropriateness of continuing the Group’s long‑standing relationship with the scheme. These considerations encompassed commercial sustainability, operational capability, and the broader social impact of AfroCentric’s role within the healthcare ecosystem.
The Board supported participation of the Group in the Bonitas RFP process, recognising the strategic importance of Bonitas as a key client and the Group’s capacity to deploy additional strategic and operational resources in support of the scheme. Concurrently, the Board conducted comprehensive scenario planning to assess the risks linked with an unsuccessful outcome, acknowledging that the potential loss of Bonitas would have material implications for the Group’s operating model and cost structure. The Board appreciated that this would require timely and measured responses to safeguard long‑term sustainability and the Group’s ability to continue serving more than three million beneficiaries across its remaining scheme clients.
Central capital trade-off
Short-term impact on human capital through organisational restructuring
Long-term protection of financial, intellectual and social and relationship capital through a sustainable operating model
2. Simplifying the portfolio to strengthen strategic focus
Analysing the trade-off
The Group took decisive steps to simplify its portfolio and address underperformance in the pharmaceutical cluster.
Declining private script volumes, margin pressure in certain pharmaceutical product lines and the loss of designated service provider contracts placed significant pressure on the business. In response, the Group initiated targeted restructuring actions, including cost right-sizing, improved inventory management and a sharper focus on profitable product lines.
The disposal of the Activo Group forms part of this portfolio simplification strategy.
Although these decisions reduce short-term scale and revenue diversification, they enable AfroCentric to concentrate resources on its core health platform capabilities, including scheme administration, managed care and pharmacy benefit management. At the same time, the Group continues to deliver meaningful healthcare impact through Pharmacy Direct’s participation in the public-sector CCMDD programme, which expanded significantly during the year.
Central capital trade-off
Short-term impact on financial and manufactured capital through asset disposals and restructuring
Long-term strengthening of financial, intellectual and social and relationship capital through strategic focus
3. Investing in integrated health capabilities despite financial pressure
Analysing the trade-off
Even in a challenging financial year, AfroCentric continued investing in capabilities that differentiate its health platform.
One example is the integration of Scriptpharm into the Medscheme environment, strengthening the Group’s integrated pharmacy benefit management proposition. This integration allows the Group to deliver coordinated pharmaceutical risk management and managed care services to scheme clients.
Similarly, the Group continued investing in clinically led innovation and value-based care models designed to improve health outcomes while controlling healthcare costs.
While these initiatives require investment in clinical, data, and technology capabilities, they are essential for maintaining AfroCentric’s competitive position and improving healthcare affordability for scheme members.
Central capital trade-off
Short-term pressure on financial capital through continued investment
Long-term growth of intellectual and social and relationship capital through differentiated healthcare capabilities
