Africa’s quiet accountants
| Written by Devapriyo Das |
| Wednesday, 17 March 2010 18:29 / The Observer |
| African accountants could be spearheading a quiet revolution to help make small businesses more competitive and innovative as the world emerges from the depths of economic recession.
In a survey conducted in November 2009, the Association of Chartered Certified Accountants (ACCA) asked 1,702 of its members, all finance professionals directly involved in advising businesses, what key advice they would give to a small business in their country, so as to enable it to take advantage of the improved economic climate in 2010. RESILIENT Commenting on its findings, ACCA said: “African accountants were more likely than their overseas colleagues to urge small businesses to improve quality and seek to enter new niches or new markets.” They were also more likely to encourage small businesses to attract and retain skilled labour. The complete report, titled ‘Accountants for Business: Living up to Expectations’, was issued on March 9. The global financial crisis was partly caused by huge banks granting large loans to unviable customers and investing savings in high-risk ventures. Its effects gradually flowed from the financial sector to the real economy. Small businesses were badly hit as they found it hard to access credit and were too insignificant to qualify for government help. Yet, by ACCA’s measures, they currently appear to be outperforming larger companies, and African small businesses have emerged as especially resilient. STRATEGISTS It believes the robust growth in post-recession Africa is partly due to a group of dynamic accountants it refers to as ‘Strategists’. Their advice is believed to have helped boost business investment confidence and drive economic recovery. Almost half of African accountants polled fall under this category. The ‘Strategists’ believe that “survival can no longer be the sole preoccupation of small businesses”, and instead urge small businesses to look at the “big picture” by seeking out new opportunities, and investing in new markets. Their focus on retaining skilled labour shows a growing maturity in small businesses: that it makes good economic sense to maintain a trained worker rather than fire staff in a recession only to hire them more expensively when the recession is over. Lucille Isingoma, the Country Manager ACCA Uganda, points out SMEs need cheaper credit now that the economy is expected to rebound. “The upturn is one of the most hazardous times for SMEs since many do not have the money they need to be able to meet increased demand – and many fail as a result of poor cash flow,” she said. SOCIAL ENGAGEMENT Interestingly, the report notes that in Africa, “support through social engagement is in fact much more common than professional advice”, with nearly half of African accountants who responded to the survey, found to have given advice in an informal capacity. This reflects the unwillingness of businesspersons in seeking regular financial advice, and the fluid nature of doing business in African economies. ‘Competitives’ formed the next largest bracket of professionals among surveyed African respondents. They seek to enhance competitive advantage within the recessionary environment, and are likely to advise efficiency measures like cost cutting, competitive pricing, and enhanced quality control and customer service. A quarter of African respondents fell into this category, which was dominated by respondents from North and South America. The rest are classified as ‘Defenders’: those likeliest to advise caution, improve financial control and reduce reliance on lenders. Whatever their category, respondents invariably recommended strengthening internal financial control, avoiding or managing risk, distinguishing between core and peripheral business activity, and monitoring product quality and customer satisfaction. Just the kind of advice good accountants would give their clients. Hits: 516 |
