While it is understood that Africa is not a homogeneous entity and that each country has its own dynamics, there are still a number of common challenges and developments facing the continent’s CFOs.
Enterprise software and software-related services company SAP CFO Deena Pillay states that it is important that CFOs of multinational organisations operating in Africa understand the diverse cultures, languages and expectations of the different regional markets.
“A CFO’s mission is to drive sustainable and profitable business growth regardless of markets or country dynamics. While regulations, languages and cultures might be different in Africa’s diverse market of 54 countries, the CFOs who are doing or who are planning to do business in Africa all face similar challenges,” she notes.
Pillay highlights that the challenges CFOs face are driving profitable business in Africa, the state of the private sector and the high costs associated with doing business on the continent.
Africa still has the potential to allow for business to thrive, regardless of these challenges that remain high on many CFOs’ agenda, she says.
“It is evident that research, development and innovation hold the key to unlocking Africa’s hidden potential that will enable CFOs to drive successful businesses that are profitable and sustainable,” Pillay states, adding that it is imperative to understand the values, needs and behaviour patterns of local consumer markets before attempting to address the specific business challenges.
Therefore, she says, engaging reputable and legitimate business partners on the ground will help accelerate the process and ensure that the business and shareholder interests are protected at all times.
“The mode of doing business in Africa has changed and so has the role of the CFO. Cash payments might still be preferable in some market environments; however, more countries are adopting innovative financial approaches regarding business transactions, paying suppliers and financial reporting.”
Other markets, such as China and Asia, have embraced innovation as a method of improving existing processes for driving better business value that fuels their economies, and Pillay believes that the African financial environment is ready to embrace innovation to drive profitable business.
According to a report published by CFO research company The CFO Research Group in 2013, for many CFOs to realise this profitable growth, finance functions will need to promote the roles in business leadership, pursuing strategic goals and overcoming strategic challenges.