As governments in Africa ease lockdown restrictions and reopen local economies, CFOs are focusing on plans to provide a safe working environment for their employees and ensure that this safety can be sustained throughout the Covid-19 crisis and recovery.
This message comes from the latest 'the PwC Africa CFO Pulse Survey', which is tracking sentiment and priorities about the Covid-19 outbreak among finance leaders.
The survey canvassed 867 CFOs from 40 countries during the week of May 4, including 55 CFOs from nine countries in sub-Saharan Africa (SSA). This survey is the fifth in a rolling series and the first to include a report on findings in Africa.
PwC Africa CEO Dion Shango says that as finance leaders adapt to the changes and challenges that have emerged as a result of the Covid-19 pandemic, they are beginning to shift their focus to a more prolonged recovery period.
“Ensuring a safe workplace is taking precedence as economies reopen and stabilising the supply chain remains critical to ongoing business continuity.”
He adds that as CFOs manage this process, business leaders will be faced with a series of decisions that will have a far-reaching impact – on their own financial future; on the wellbeing of their employees, customers and other stakeholders; and on society at large.
In terms of revenues, the survey finds that times are tough for business, with few respondents envisaging the coming months being easier. Most African CFOs (89%) expect a reduction in revenue this year.
Further, 65% of African CFOs predict a decline of at least 10% in their company revenue and/or profit this year.
Just like their global counterparts, more than half of CFOs expect a decrease of up to 25% in revenue as a result of Covid-19.
In terms of cost containment, the survey finds that businesses are actively dealing with the effects of a sharp decline in economic activity and even temporary closure of their operations. In this environment, PwC states that African CFOs are taking decisive action to safeguard their financial positions, with 85% (compared with 81% internationally) saying that businesses are implementing cost containment measures or deferring or cancelling planned investments.
As far as business recovery goes, the survey points to 38% of African CFOs believing their company could return to "business as usual" within three months if Covid-19 were to end immediately.
It also shows there is a growing sentiment in many territories that recovery may take longer. The survey finds that 42% of African CFOs expect it to take more than six months, while 9% expect it will take more than a year to restore their businesses.
Further, the survey shows that international respondents are more optimistic than African CFOs about how quickly they can re-establish "business as usual" in their organisations.
The survey finds that regarding a change in supply chains, 51% of CFOs cite developing alternate sourcing options as the most pressing area, led by Africa (64%) and Turkey (63%).
The survey also highlights that African CFOs favour a strategy of cost containment, with the majority focusing on facilities and general capital expenditure (Africa: 82%; international 83%) followed by investments in the workforce (Africa: 52%; international: 49%) and operations (Africa: 36%; international: 53%).
According to the survey, CFOs in Africa responded that they are less likely than their global peers to be considering cancelling or deferring investments in operations, information technology, research and development and customer experience.
In addition, only 15% of African CFOs (international: 16%) are considering deferring or cancelling investments in digital transformation.
In terms of protection for employees, the survey points out that African CFOs (Africa: 91%; international: 76%) are considering workplace safety measures and requirements such as masks and testing, and 65% (international: 65%) say they will reconfigure work sites to promote physical distancing.
Further, as companies and employees take action to respond to the pandemic, 45% of African CFOs expect productivity losses owing to lack of remote work capabilities, compared to an overall average of 33%.
Thirty-five per cent of African CFOs expect changes in staffing owing to low demand and are considering temporary leave or furloughs. Compared to an overall average of 29%, 18% of African CFOs also expect to conduct lay-offs in the next month.
As far as reimagining workplaces, the survey finds that more African CFOs (62% versus 48% internationally) say they will be accelerating automation and new ways of working once they transition back to ‘normal’.
Given the need to limit the number of people in close contact, 60% (compared to 49% international) are considering making remote work a permanent option where feasible.