Improving investor confidence has emerged as one of the top strategic priority for the Chief Financial officers (CFOs) in Botswana; this is according to Botswana CFO Report for 2015 conducted by tax and audit firm, Deloitte. This aligns with South Africa and other Southern Africa countries that have identified it as their leading priority. “A reduction in investor confidence may relate to political concerns highlighted by Botswana CFOs, which include the need to effectively prioritise government spending on the provision of social services, job creation and service delivery as well as reduce corruption and deliver more effectively on infrastructure projects,” says the report.
The survey in which 45 CFOs, mainly from the banking and securities, mining, insurance and investment management participated, says they are among other issues concerned about the fragile state of global economic recovery which they consider the greatest business risk. CFOs were asked to give their views on a variety of issues such as the economy and business climate, current and future operations, funding and cash flow, business strategies, domestic and political challenges and also to provide their views on the role of their positions.
In response, the CFOs said they expect the Pula to depreciate against the US dollar by -4.1 percent during the year. They have also indicated their cautiousness with regard to expanding into other regions of the continent. The report states that about 53 percent of the CFOs who participated in the survey are in favour of deploying cash into improving current operations while 49 percent would like to see it retained in liquidity. Also at the top of their list of priorities is paying dividends to shareholders which is said to be differing from many of their counterparts in South Africa and other regions where paying dividends ranks low in the priorities list.
The local CFOs have indicated their reservations towards expanding into other regions of the continent. The report says those looking to expand into new markets in Southern Africa over the next three years amounts to just 18 percent, down from 29 percent in 2014. Only nine percent of the participants have ambitions to venture into West Africa and four percent into East Africa. This is said to be surprising given that the slowing GDP growth in South Africa has compelled many leading firms in the country to contemplate international expansion.
Concerning challenges faced by the industry as a whole, the CFOs have moved the disruptive power supplies up the list of concerns for this year due to South Africa experiencing electricity crises where Botswana obtains the bulk of its electricity. On top of the views they have given in response to what they were asked are said to be concerned about poor company perfomance and meeting the demands of the Board and CEOs. The CFOs say they are also stressed about having insufficiently skilled support staff and are battling to find and retain talent.
The CFOs further say they are bogged down by excessive workloads often comprising of too much administrative work. The report says the feeling is echoed by CFOs across Africa, who are struggling to juggle the multiple roles they are expected to play, from leading their finance teams and delivering good metrics to the board, to creating value for shareholders and providing strategic direction.