Page 1

AB

ACCOUNTING AND BUSINESS AFRICA SPECIAL EDITION 2012

BRIGHTER PROSPECTS

FINANCE PROFESSIONALS AND AFRICA’S FUTURE CAPITAL MARKETS LIFTING THE RESOURCE CURSE ENGINE FOR GROWTH THE ROLE OF SMES AFRICAN MULTINATIONALS

AFRICA_coverfront.indd 1

01/06/2012 12:29


s t n a t n u o c g ac i b k n d small) i h t o (an wh

AFRICA_innerspread.indd 16

in e e s ur t ra o p e r u s a g ras We e n s h ave r e b m e e. an d m pic t ur ig ger b d e n h t a t of der s d ls o un a ess an n d i n s A al b u ’s t n a o i h t T a s. in te rn t is sue t s ar e e k r a t an l o c al m cc o un r CCA a A . Th ei y s h s w u sin e b s r w o f o a ll good inin g d us tra ive an t c rig o r o e e f fe b d o t n a them a teve r n t , wh n ge. e l l a h r eleva the c r e v e wher

01/06/2012 12:31


3 Shaping the future It’s time to see Africa in a new light. The continent’s economy is growing strongly and its prospects are bright, but it also faces significant challenges. Africa is open for business and its influence on the global economy is mounting. Through technology, it is connecting business to business, business to consumers, and itself to the rest of the world. A bold group of African multinationals are blazing a trail across borders, creating value for different stakeholders and extending their footprint outside the continent. Meanwhile, innovative SME entrepreneurs are the hope for job creation and further growth. As we explore in this publication, professional accountants have important roles to play in supporting this growth and in Africa’s future. These range from providing strong and strategic insights, leadership and support so businesses can make the best decisions on the best information, to offering entrepreneurial value and practical help as trusted advisers to SMEs. They also have critical roles to play in helping to build capacity in capital markets and in strengthening the institutions, systems and cultures – such as good-quality financial reporting and corporate governance – that create environments in which businesses can thrive. Professional accountants can also help ensure that this growth is sustainable and creates real value for African society as a whole. As we go to press, the ACCA Council, comprising senior members from across the world including four from Africa, is about to hold its annual meeting in Kenya – and additional meetings in Ethiopia, Tanzania and Uganda. The theme of the event is Accountants for Business in Africa: supporting growth, shaping the future. Council members will be exploring and discussing African challenges and opportunities, and furthering relationships and partnerships across the continent. ACCA looks forward to supporting professional accountants in playing their part in shaping Africa’s future and further unleashing its considerable potential. Dean Westcott FCCA, ACCA president Jamil Ampomah, director – sub-Saharan Africa, ACCA

Editors Lesley Bolton, Alvin Chikamba, Chris Quick Designers Jackie Dollar, Robert Mills Sub-editors Dean Gurden, Peter Kernan, Eva Peaty, Vivienne Riddoch

CONTENTS 4 Economies Will some countries lose out? 6 Capital markets Building a fit-for-purpose funding infrastructure

Copyright ACCA 2012 The Council of ACCA and the publishers do not guarantee the accuracy of statements by contributors or accept responsibility for any statement they may express in this publication. No part of this publication may be reproduced, stored or distributed in any way without the express permission of ACCA.

8 Multinationals Leaders of the expansion pack 9 Finance professionals Making business in Africa sustainable 11 SMEs They may be small, but their role is huge 14 Connectivity IT could give Africa real control of its resources 16 Profile Mauritius minister Devanand Virahsawmy and the ‘5 Es’ of development success 18 Sustainability Political reform is the key

Cover image: African Union Conference Center, Addis Ababa

AFRICA_intro.indd 3

About ACCA

Research and insights

ACCA is the global body for professional accountants. We have around 10,000 members, over 80,000 students and 11 offices in sub-Saharan Africa. We offer business-relevant, first-choice qualifications to people of application, ability and ambition who seek a rewarding career in accountancy, finance and management. We support 154,000 members and 432,000 students around the world throughout their careers, providing services through a global network of 83 offices and active centres (see back page for details). Accounting and Business is ACCA’s magazine for members. Recent issues can be viewed at www.accaglobal.com/ab

ACCA’s global research programme explores trends and issues crucial for business, economies, society and the profession now and in the future. Recent reports address finance diversity, risk management and finance transformation. For these and other insights, visit www. accaglobal.com/researchandinsights

ACCA contacts

Jamil Ampomah, director – sub-Saharan Africa, ACCA jamil.ampomah@accaglobal.com Alvin Chikamba, head of policy – sub-Saharan Africa, ACCA alvin.chikamba@accaglobal.com

01/06/2012 12:31


4

africa economies

The big picture In many cases, African countries’ GDP is running well ahead of the developed world. But problems must be solved if the success story is to continue, says Alnoor Amlani FCCA Africa has traditionally been the most confident of the major regions in ACCA/Institute of Management Accountants’ quarterly Global Economic Conditions Survey and one of the most optimistic regions when it comes to the global economy and its prospects. Africa remained the most confident and optimistic of all the regions in the first months of 2012: 39% of respondents in the continent reported confidence gains in early 2012, up from 27% in late 2011. Moreover, most respondents in Africa believe the global economy is recovering or about to do so (54%, up from 31% in late 2011).

Botswana’s best friend: with diamond mining the key industrial sector in the national economy (it currently accounts for a third of GDP, three-quarters of export earnings, and half the government’s revenues), the country is a paragon of Africa’s resource riches – and dependency

AFRICA_economies.indd 4

Africa’s strong growth over the last decade, despite the series of global financial and food shocks, is perhaps the source of this optimism. In the current gloomy global business environment Africa has largely avoided a recession; indeed, some African countries continue to achieve very good gross domestic product (GDP) growth while their former colonial masters battle to avoid economic catastrophe. The World in 2050, a report by HSBC, forecasts that five of the planet’s fast-growth countries are expected to be located in sub-Saharan Africa. Demographics will play a crucial role, according to the report, helping parts of Africa finally emerge from economic obscurity. It estimates that Nigeria’s GDP will be US$0.5 trillion in 2050, compared with $0.1 trillion in 2010. Since decolonisation and independence in much of Africa some 50 years ago, the continent has struggled to contain widespread poverty, corruption, disease, famine and drought, civil war, political instability, and other social issues. These challenges remain, but over the decades Africa has also created a working population that has come of age, with improved literacy, education levels and health. The continent has also retained its rich pool of resources, established its own growing middle class and embraced technology in the field of information management, telephony and biotechnology. These factors are enabling the current growth and are likely to drive it further for some time. The scramble for Africa’s resources (especially oil and minerals) that is presently under way is driven by rising global demand, in particular from the East. The greater activity can be observed from the various new mining, oil exploration and agriculture projects being launched in Ethiopia, Mozambique, Uganda, Nigeria, Angola, Kenya and other countries. In this rush for resources the West finds itself competing with the East – mainly China and India, which are re-engaging with the continent in their new roles as global superpowers. Africa is benefiting from the competition between the East and the West. The

01/06/2012 12:29


5 demand for resources by the highly populated emerging economies of the East is pushing up the prices of many commodities and attracting investment in oil and mineral extraction, manufacturing and agriculture. However, not all the drivers are positive. Some opposing factors threaten to prevent some countries from benefiting from the renewed global interest in Africa.

Opposing factors According to the African Development Bank report, Africa in 50 Years’ Time, there are issues that need to be addressed if Africa is to succeed in developing itself in the future. Governance remains the critical area. A few are becoming rich to the detriment of the multitude of poor. Dictators pepper the continent, clutching its resources, distorting the rule of law and property rights and holding their countries hostage to their whims. Some countries in North Africa have removed a few of these dictators. More work needs to be done by African leaders to attain effective political governance across the continent. Climate change poses a regular challenge, bringing drought and famine to sub-Saharan African countries that are too dependent on the developed world to address these problems comprehensively and decisively. Some countries, like Ethiopia and Kenya, would be far ahead if they could solve the problem of frequent droughts. Infrastructure continues to hinder progress because of poor planning and investment by governments. In most countries, for example, electricity supply is erratic, and road and railway networks poor and depleted. This is likely to be a major bottleneck for the immediate and short-term future, restricting the growth prospects highlighted above. Conflict and civil unrest plague many countries and this is likely to continue in situations where political systems are not democratic. The present high and increasing commodity prices that are driving investors towards new African projects are not expected to persist. The longterm downward trend may not apply to oil, but prices of other commodities are expected to decrease and reduce trading profit margins.

AFRICA_economies.indd 5

Persistent inflation is a real problem, increasing the cost of inputs and unpredictability of returns. The issue is particularly problematic in subSaharan Africa where the International Monetary Fund estimates year on year inflation at 10% per annum. Africa’s big cities – Johannesburg, Lagos, Cairo and Nairobi – are set to grow even faster, taking in people from the countryside and foreigners from the East and West alike. These cities will be joined by new ones birthed by the flow of migration from the rural areas and crowded cities. However, Africa’s cities will grow erratically and suffer difficulties because infrastructure is deficient, planning is ineffective and there are issues with land and property rights that need to be corrected. Meanwhile there will be greater exploitation of mineral and other resources in the countryside,

perhaps with the danger of resource depletion and exhaustion and environmental damage. It will be up to Africa’s people to hold their leaders accountable for their resources and to ensure they are not simply spirited away for personal gain rather than the national good. The launch in May in Cape Town of the OECD’s Tax Inspectors Without Borders initiative to help developing countries increase their domestic revenues by making their tax systems ‘fairer and more effective’ is a step in the right direction. Most of Africa has a reputation for poor tax collection. It is time that African countries reformed themselves to secure their rise from poverty. Alnoor Amlani FCCA is an independent financial management consultant in East Africa, who writes regularly on social and business issues

VIEW FROM: TAIWO OYEDELE FCCA Partner, PwC Nigeria The rewards of investing in the region far more than compensate for the relatively higher risks. For discerning investors, the various challenges facing Africa such as poor infrastructure actually present excellent business opportunities. There is a large untapped market but only those who are bold to invest notwithstanding the difficulties will reap the benefits.

VIEW FROM: LEONARD MUSUSA FCCA Country senior partner, PwC Tanzania Until recently, we were not talking of African growth prospects in the same positive way we are now. Africa was for a long time a forgotten continent due to frequent negative media reports. However, the global economic crisis has helped to focus global investors’ minds on finding alternative destinations for investment – destinations such as Africa.

VIEW FROM: MARIE MCCREA FCCA Partner, Centre for Innovative Leadership The increase in connectivity over recent years is a wonderful development for Africa (see page 14). However, its rate of growth appears out of sync with other areas that are so important to the continent – such as poverty reduction and improvements in education. 3G and 4G connectivity will harness this appetite and at the same time improve education.

01/06/2012 12:30


6

africa capital markets

Lifting the resource curse

League table

Rapidly rising mineral wealth offers great opportunities for the frontier economies of Africa, but well-governed capital markets are essential if they are to benefit in the long term GLOBAL GROWTH LEADERS TO 2015 1 China 9.5% 2 India 8.2% 3 Ethiopia 8.1% 4 Mozambique 7.7% 5 Tanzania 7.2% 6 Vietnam 7.2% 7 Congo 7% 8 Ghana 7% 9 Zambia 6.9% 10 Nigeria 6.8% Source: IMF

AFRICA_capmarkets.indd 6

Which was the fastest-growing economy in the world between 2001 and 2010? China, of course. Not so, according to a strikingly upbeat article on Africa, published at the end of last year by The Economist. Try Angola, with an average annual growth rate of 11.1% against China’s 10.5%. Of course, the Angolan economy is a fraction of China’s in size, but the trend is there to see: of the 10 fastestgrowing economies over that decade, six were in sub-Saharan Africa. All had average annual growth rates of 7% and more. Over the five years to 2015, the International Monetary Fund forecasts that African countries will occupy seven of the places in the top 10, the African leader being Ethiopia in third place with 8.1% forecast annual growth (see left). If that seems surprising, you need only go back to the country you may have first thought of as global growth leader. China’s surging growth has created unprecedented demand for energy and minerals, in turn propelling

much faster rates of inward investment and growth across the resource-rich nations of Africa. Jeremy Grantham, one of the founders of US asset manager GMO, has calculated that after falling in real terms for more than a century, commodity prices made up their entire real-terms decline and more in the years after 2002. This burst of growth in the socalled frontier economies of Africa is producing enormous opportunities as well as some familiar challenges. Many of the latter are related to the resource curse – rapidly rising mineral wealth can lead to severe problems of economic and financial governance. To turn to another list, African nations make up almost two-thirds of the 22 judged most at risk of the resource curse in a December 2011 report by Oxford Policy Management. In May 2012 the World Economic Forum on Africa came to Addis Ababa, Ethiopia, for the first time, for its 22nd meeting

01/06/2012 12:38


7

AFRICA_capmarkets.indd 7

*THE RACE IS ON

According to HSBC’s The World in 2050 report, out of 26 fast-growth countries (those with 5%+ growth) five will come from sub-Saharan Africa

2010

$16BN $288BN

$17BN $196BN

$8BN $18BN $163BN

2050

The challenge, in every case, is to turn a rapid rise in income and inward investment into productive assets for the long-term benefit of the economy. Properly functioning financial markets are a critical means of allocating investors’ capital to businesses in this fashion. Given the importance placed on robust capital markets, ACCA is undertaking research to look at the key success factors in their development. ACCA members in Africa have seen the importance of their countries as financial centres grow very rapidly. During the most recent global financial crisis, some 50% of ACCA members in Africa reported that their countries had become more or much more important as financial centres – a number exceeded only by the economies of South East Asia. Alvin Chikamba, head of policy for sub-Saharan Africa at ACCA, points to the emergence of ‘African regional champions’ (multinational companies that trade within Africa) as an important indicator of the continent’s development. This trend is ‘changing the game in Africa’, according to Manos Schizas, senior policy adviser at ACCA, and goes hand in hand with another: the formation of regional blocs as national stock exchanges link up with each other – the East Africa bloc of Kenya, Uganda and Tanzania is particularly striking here. Schizas explains: ‘The more exchanges move towards regional integration, the more companies will have the opportunity to extend their influence. Capital markets are important in financing these people across borders, which they couldn’t really do on the basis of savings in their national economies.’ One reason for the relative lack of development of capital markets in frontier economies in spite of their notable successes is the lack of nonbanking financial services such as pension funds and insurers with their pools of savings ready to invest. Tewodros Tilahun FCCA, general manager of Diligence Consultancy Services in Ethiopia and member of the ACCA Global Forum for Corporate Reporting, says the development of capital markets requires the establishment of a well-equipped

TANZANIA

ETHIOPIA

KENYA

$12BN Size of economy at constant 2000 US$

$111BN UGANDA

$100BN GHANA

VIEW FROM: JAPHETH KATTO FCCA Capital markets are fairly new in many African countries, but as a vital source of the long-term capital necessary to finance business growth and infrastructure megaprojects they could drive the continent’s economic agenda. It has been said that Africa is the next frontier for investment and it is indeed laden with vast opportunities for growth, with a growing middle class and oil, gas and minerals discovered in several countries. There is no better and more transparent channel than the capital markets to raise the massive quantities of capital needed to develop these resources. More and more companies will turn to Africa’s stock exchanges for funds. CEO, Uganda Capital Markets Authority, and board member, International Federation of Accountants

*WORLD ECONOMIC FORUM

Held in Addis Ababa, Ethiopa for the first time, the World Economic Forum on Africa in May – at the Sheraton Addis – attracted a variety of influential speakers. The consensus was that Africa had had its best decade in over 50 years, but there is still serious work to be done. ‘We should not confuse economic growth with economic transformation,’ said Donald Kaberuka, president of the African Development Bank, warning that the structure of African economies has not changed fast enough and countries remain vulnerable to external shocks. Kaberuka highlighted two vital drivers for the future: the education of poor children and the development of small and medium-sized enterprises to close the wealth gap. Gao Xiqing, president and vice chairman of China Investment Corporation, felt it was essential that African countries ensured growth was as inclusive as possible, and did not follow China’s prioritisation of growth over development, which has brought huge wealth inequality and environmental problems. It was a sentiment echoed by Kofi Annan, chairman of the board of the Alliance for a Green Revolution in Africa and the Africa Progress Panel. ‘We cannot talk of growth when millions of people are left behind,’ he said, before going on to stress the need to empower the young and strengthen health and education during the next decade.

01/06/2012 12:38


8

AFRICA MULTINATIONALS

*BUSINESS BENEFITS

Multinationals based in sub-Saharan Africa are reshaping the African corporate landscape, says ACCA’s Alvin Chikamba

Team effort: many stock exchanges are working together to form regional blocs system. In Ethiopia, for example, the Ethiopian Commodity Exchange (ECX) has created a reliable end-toend system for handling, grading and storing commodities, matching offers and bids for commodity transactions, and settling transactions via a riskfree payment and goods delivery system. A capital market, he says, could be established by replicating the infrastructure already in place or even using the same infrastructure. ACCA’s local offices in Kenya and Uganda have also put considerable effort into educating financial journalists in these markets, and through them the wider public. Schizas says: ‘In places where capital markets are new, it’s very hard to explain to people what’s going on in them to avoid the sensationalism that can create bubbles. So we’ve worked with reporters quite closely in both countries.’ These are relatively early days still, but the forces powering the growth of Africa’s financial centres are both strong and long term. In the years ahead we can expect to hear a lot more about African companies and stock exchanges – from African financial journalists. Andy Davis, journalist ACCA’s report, Making Capital Markets Work in Emerging and Frontier Economies, is available at www.accaglobal.com/access

AFRICA_capmarkets.indd 8

The 30 biggest African home-grown multinational corporations grew at an annual rate of almost 30% from 2006 to 2009, outperforming both developed and emerging market indexes. In comparison, growth in the 500 biggest US firms fell below 10% in 2006 and 2007, according to the Pioneers on the Frontier: Sub-Saharan Africa’s Multinational Corporations report by the Initiative for Global Development. Innovative sub-Saharan African multinational corporations (AMCs) are expanding into other parts of Africa and even further afield. Their expansion is driven by increased political stability, better regional integration, and enhanced economic growth. Africa is set to become a key player in the global value chain. For astute and forward-looking investors, AMCs present attractive opportunities for investment in capital markets that are relatively illiquid, subject to inefficiencies and yield inadequate information. For a continent starved of capital, AMCs are a focus of foreign direct investment and act as key players in enhancing regional trade. An often forgotten benefit of AMCs is their ability to empower small and medium-sized enterprises (SMEs) through carefully crafted and mutually beneficial partnerships. South Africa’s 2010 entry into the BRIC grouping of Brazil, Russia, India and China to form the BRICS association will further unlock economic activity in the region, and AMCs are best placed to forge partnerships within this context. The most successful multinationals in Africa’s complex business world cut across a diverse range of sectors and are based in countries across the region but particularly from the growth hubs of South Africa, Nigeria and Kenya. The relatively higher levels of economic and financial development in South Africa make it home to most AMC champions, but the annual list of Africa’s top 250 companies published by African Business magazine shows the rest of the continent is catching up, with 38 West African companies making it onto the lastest list. Anglo American, SABMiller, Standard Bank, MTN, Aspen Pharmacare and Shoprite made the cut while Massmart’s global value proposition was reinforced when Walmart took a controlling interest in it. Ecobank has risen out of Togo to become a banking leader in middle Africa. In East Africa, Kenya Airways and Equity Bank continue to make moves while the Rogers Group in Mauritius grows in stature. Oil-rich Nigeria leads in the West particularly in financial services with banks such as UBA, Zenith and First Bank. But the most valuable group in West Africa at US$11bn is the Dangote Group, led by Aliko Dangote, an entrepreneur who is now Africa’s richest man. Clearly SMEs can grow, internationalise and list on the world’s biggest capital markets. But while AMCs can be a powerful engine for economic development in sub-Saharan Africa, their growth will also depend in part on the actions of governments in their host countries. Changes in the political and economic environment will still affect AMCs’ growth. The infrastructure challenge will require public private partnerships spearheaded by such AMCs. In order to compete meaningfully with multinationals such as Unilever, Shell, Tata and HSBC, AMCs must continue to embrace globalisation. This means world-class operational and financial capability, consolidated merger and acquisition activities, presence in strategic global locations, worldwide brand strength and best-in-class international talent. One of the biggest challenges for most organisations is attracting and retaining talent. For emerging markets generally, and Africa in particular with its low levels of education, this issue is more pronounced. Alvin Chikamba is head of policy for sub-Saharan Africa at ACCA

01/06/2012 12:39


AFRICA FINANCE PROFESSIONALS

9

Driving the value Finance professionals are central to Africa’s future economic growth, providing pillars of governance that will drive the continent’s sustainability and prosperity, writes ACCA’s Alvin Chikamba Not all stories have a happy ending. But the story of Africa’s recent economic growth looks promising. As is explored elsewhere in this publication, while the economies of the developed nations in Europe and America continue to wrestle with the spectre of recession, Africa has for the most part seen impressive and sustained growth. But with this growth comes new challenges, and it is vital that those with the financial skills pull together and provide the necessary support for growing, but still fragile, economies.

Supporting growth ACCA has long argued that its members, who collectively have an enviable expert understanding of both management and financial accounting, and the ability to act as strong and trusted partners, are ideally placed

AFRICA_financeprofs.indd 9

to support growth in Africa. This can apply at all levels in the continent’s economies – within multinational companies, large domestic organisations, even the growing small and medium-sized enterprise (SME) sector. There are of course significant variations between the African economies. Not all have the luxury of natural resources, but evidence from organisations such as the International Monetary Fund suggests that it is the diversified economies that appear to be performing best. The more open economies, such as South Africa, can be more susceptible to shocks on the global stage, whereas others can be affected by natural disasters and famine, conflict and social unrest. ACCA firmly believes that the economic aspirations of these economies cannot be delivered without

strong and strategic leadership from accountancy professionals.

Developing capacity Developing robust governance and effective financial reporting in the African economies poses the problem of capacity. For the accountancy profession this means that the institutions, the standards and the people need to be in place, they need to be functioning, they need to be fit for purpose. This is an issue that is taken very seriously by organisations such as the United Nations Conference on Trade and Development (UNCTAD). Through its working group of experts on international standards of accounting and reporting (ISAR), supported by institutes such as ACCA, UNCTAD is driving a capacity-building template that places finance professionals at the core of the infrastructure.

01/06/2012 16:38


10

AFRICA FINANCE PROFESSIONALS

Strengthening governance Of course, the best infrastructure in the world will be worthless if governance is not taken seriously – if the importance of ethical behaviour is ignored and financial transparency not embraced. Standards of corporate governance in the region are improving, but still need to be developed further if the public and investors alike are to retain confidence in the ability of the region to deliver genuine sustainable growth. The launch of the Pan African Federation of Accountants (PAFA) in May 2011 was a positive move, providing a strong voice and setting the stage for accountants to play a greater role in the region, supported by the first Africa Congress of Accountants, held last November. An ACCA survey on leadership and governance in Africa last year found mixed views on the effectiveness of governance codes and frameworks in improving practice. Despite providing guidelines and helping to reduce unethical behaviour, the majority of accountants surveyed believed that the lack of obligation or enforcement to comply with codes combined with political intervention in decision-

Japheth Katto FCCA, CEO of the Uganda Capital Markets Authority and board member of the International Federation of Accountants, welcomes Kenyan president Mwai Kibaki to the Africa Congress of Accountants last year. IFAC has praised PAFA for its decision to adopt international standards in accounting and auditing making were making codes and frameworks less effective. However, there is no doubt that a strong professional accountancy profession can improve the application and understanding of effective corporate governance, whatever the sector or size of business.

VIEW FROM: VIZENGE KUMWENDA FCCA Deputy managing director, NICO Holdings, Malawi Globalisation is standardising the roles of finance professionals. The value of top finance professionals will lie in their ability to understand the operations of their entities and help structure strategies. At the centre of this process will be risk management, with more finance professionals moving to the centre of systems development and implementation roles.

VIEW FROM: SEBASTIAN OWUAMA President, Pan African Federation of Accountants Financial and accountancy services have a very strategic role to play in the future of the economic growth and development of Africa. The projections of the World Bank indicate that Africa, besides China and India, is the next investor destination. To attract investors, you need a reliable accounting system with a high level of integrity. Therefore, there is a correlation between a strong economic development drive and the strength, reliability and integrity of the financial system in place. Unfortunately, the levels of economic development, low capacity building and poor education have greatly affected growth in the financial and accountancy sectors.

AFRICA_financeprofs.indd 10

Creating sustainable value If nothing else, the global economic crisis has shown the importance of creating long-term value. This requires companies to plan professionally, devise strategic business plans and to manage risk. This is precisely what accountants are trained to do. As an early advocate of the importance of corporate social responsibility issues and environmental accounting, ACCA’s view is that this needs to go wider than the bottom line. Finance professionals in Africa are well placed to promote narrative reporting and integrated reporting that encompass a broader perspective.

Promoting small enterprise Finally, finance professionals do not just perform on the large corporate stage. SMEs are also making an increasing contribution to economic growth, and they need ‘complete finance professionals’. Such professionals have a wide range of skills – financial reporting, management accounting, tax compliance, risk management and performance analysis. No one is better placed to provide the insights that create real value than the professional accountant. Alvin Chikamba is ACCA’s head of policy for sub-Saharan Africa

01/06/2012 16:38


AFRICA SMES

11

Buying into the future SMEs are fuelling African economies and are essential to job creation. But access to finance and inadequate infrastructure are issues which need to be addressed Togolese justice minister Kokou Biossey Tozoun has said that ‘small and medium-sized enterprises (SMEs) are the heart of the African economy’. He isn’t wrong. Respected South African economist Dawie Roodt backs this statement up, saying he can’t think of much that is more important than small business in Africa. ‘In Somalia, for example, there is no government, but 8,000 cellphone providers. This shows that you may not need government, but SMEs are crucial to Africa’s poor,’ he says. Small business, says Anne Kimari, head of finance of Faulu Kenya and a member of ACCA’s Global Forum for SMEs, is crucial to Africa’s future as it constitutes ‘virtually all the enterprises that exist in a nation’. She adds: ‘The only exceptions would be government-run parastatals and a few large institutions, mostly multinationals. Small businesses thus contribute significantly to the GDP of a country and employ the bulk of the workforce.’ Dr Jacqueline Chimhanzi, head of Deloitte’s Africa desk, says SMEs are

AFRICA_SMEs.indd 11

VIEW FROM: FABIAN KASI FCCA Managing director, Centenary Rural Development Bank Small and medium-sized enterprises (SMEs) have been viewed as the engine of development, especially in emerging economies like Uganda. They play a major role in providing employment and most importantly, plough back their profits rather than externalising them. SMEs are therefore the potential drivers of development for Africa as a whole. SMEs are likely to develop into formidable enterprises, especially if supported by development agencies and governments to address the bottlenecks they face like lack of capital, human resource capacity, corporate governance, costs of operations, branding and markets.

the ‘growth engines that fuel African economies and create employment’. ‘Here is a statistic that is, at once, interesting and daunting: in 2050, Africa’s population would have grown from its current 1 billion to 2 billion. A key implication of this is for the SME sector to develop even greater employment absorptive capacity,’ she says. A Policy Insights paper published jointly by the OECD’s Development Centre and African Development Bank,

Financing SMEs in Africa, reveals the extent of small businesses as major employers across the continent. By 2003, SMEs in Kenya had employed some 3.2 million people and contributed 18% of GDP. In Morocco, 93% of all industrial companies were SMEs accounting for 38% of production, 33% of investment and 46% of all jobs. And in Nigeria, SMEs accounted for 95% of formal manufacturing and 70% of industrial jobs.

01/06/2012 16:39


12

AFRICA SMES

Previous page: SMEs like this shop in Kenya are the engine of African growth Above: pieces of material with traditional designs are sold at a market in Zambia In South Africa, ‘micro and very small businesses provided more than 55% of total employment and 22% of GDP in 2003. Small firms accounted for 16% of both jobs and production and medium and large firms 26% of jobs and 62% of production,’ says the report. Despite the big numbers, Roodt believes the contribution of African SMEs may be understated. ‘Africa’s economy is underestimated by as much as 20%. The informal sector is huge,’ he says. It is also surviving under difficult conditions. In April, South Africa’s economic development minister Ebrahim Patel launched a new government agency to fund small businesses, focusing on small-scale manufacturing, agro processing, mining services, the green economy and tourism. Sizeka Rensburg, chair

AFRICA_SMEs.indd 12

of the new Small Enterprise Finance Agency, says that although SMEs ‘hold potential for job creation, economic growth, and improving the conditions of our people’, most ‘still find it difficult to access finances through banks and commercial financing institutions’. Kimari agrees. ‘It is not easy for small business to access finance, because of the perceived risk that financial institutions have of SMEs,’ she says. In Kenya, an SME owner would need to first demonstrate that their business had been sustainable for at least three years, had good collateral, good capital, and viable and verifiable business plans and strategic plans. ‘The man in the street who is an SME owner will rarely be in a position to meet even one, let alone all of the above so as to qualify for financing,’ she says.

Female empowerment For women it is even more difficult, says Chimhanzi. ‘The rate of women’s entrepreneurship is high in Africa –

higher than in any other region in the world – as a result of a number of societal barriers that leave women few options but to find sustenance in selfemployment,’ she says. Women are less educated than their male counterparts and hampered by discriminatory family, inheritance, labour and land laws which limit their control over assets and their decisionmaking authority. ‘Thus, women entrepreneurs on the continent tend to be concentrated in the informal, micro, low-growth, lowprofit areas,’ Chimhanzi says. ‘The 2010 Africa Competitiveness Report by the World Economic Forum, the World Bank and the African Development Bank put forward that Africa’s competitiveness can be augmented by addressing four issues – one of which is supporting women entrepreneurs to move into higher value-added activities,’ she adds. According to the World Bank, private businesses in West Africa faced some of the largest barriers and constraints in the world. But in December 2010,

01/06/2012 17:08


13 a bloc of 16 countries in the region unanimously approved changes to legislation aimed at increasing small business access to credit and reducing startup barriers. Kimari says small businesses in East Africa face the added difficulties of import tariffs imposed by neighbouring countries preventing them from easily accessing their markets.

them to access finance, make formal finance requests to banks or other institutions on their behalf, and write business proposals. Chimhanzi believes that finance professionals can help SMEs by ‘thinking outside the box’. ‘Africa requires institutions to think differently and adapt accordingly. There is a huge upside to giving small

‘AFRICA REQUIRES INSTITUTIONS TO THINK DIFFERENTLY AND ADAPT ACCORDINGLY. THERE IS A HUGE UPSIDE TO GIVING FINANCIAL SUPPORT’ ‘Corruption and unfair trade practices also make the price of doing business inordinately high,’ she says. Governments, she says, could help by reducing licensing requirements and easing procedures for tax compliance, as well as helping to provide market outlets and facilitating export deals which are not exploitative. They could also provide access to affordable financing and realistic incentives. ‘Tax breaks for companies that want to list on the stock exchange will not necessarily motivate small businesses to thrive. The incentives need to be very basic for them to be appreciated,’ she says.

Less draconian laws Chimhanzi says SMEs are hampered by inadequate infrastructure, skills shortages, high rates of enterprise mortality, restricted market access and cumbersome regulatory requirements. For small business in South Africa to perform better, says political analyst and futurist Daniel Silke, the country’s labour laws have to be less draconian. ‘South Africa has political structures which have been slower than the rest of the African continent to open the doors of liberalisation. As a result we are seeing the small business sector suffer onerous labour conditions – the difficulty in hiring and firing is the biggest impediment,’ he says. ‘The difference is that the trade unions play a secondary role in the rest of Africa. Here, they put the brakes on small business. The global trend will hit South Africa eventually.’ Finance professionals, Kimari says, can assist small business owners in Africa by, among other things, helping

AFRICA_SMEs.indd 13

businesses greater levels of financial support,’ she says. ‘We are seeing a trend towards more unsecured lending on the continent on the basis of psychometric tests and other qualitative approaches in place of, or in addition to, traditional credit scoring methods. These place emphasis on character and integrity which are more reflective of a person’s propensity to pay back a loan.’ For Roodt, accountants can help to create legal platforms for community banking – neighbourhood money pooling schemes – and help authorities establish community banks in which the savings are formalised. One area in which Africa is ahead of the global pack is in mobile commerce,

as the development of mobile technology has overtaken that of fixedline communications. In Kenya, mobile money transfer (MMT) service providers are well entrenched, says Kimari. The MMT of Kenya’s biggest mobile service provider, Safaricom, is used by 11.9 million customers, or 54% of Kenya’s adult population, and processes more transactions domestically than Western Union does globally. By August 2010, 19,500 retail stores used the system, half of which were situated outside urban centres. Although South African mobile network operators are key players in those markets, the mobile banking business is yet to be introduced in the country. Silke believes that African SMEs face a bright future. ‘They are a front-burner item for governments across the continent which have moved to a greater understanding of bottom-up private enterprise as the key driver. It is a political imperative to enhance the sector,’ he says. ‘The failure of governments to create jobs, combined with the global recession, forces individuals to be more proactive. It is politically important for governments to be seen to be supporting small business.’ Nicki Gules, journalist

VIEW FROM: PEARL ESUA-MENSAH FCCA Deputy managing director, UT Bank Part of the constraint facing the private sector in the country is access to medium and long-term loans. While the private sector has been touted as the engine of growth, some contend that it has not received the support needed. We have always believed in the small and medium-sized enterprise sector. We will focus on it and extend banking services.

VIEW FROM: SYLVIA BANDA Ambassador, African Women’s Entrepreneurship Program Zambia; member, ACCA Global Forum for SMEs; MD, Sylva Professional Catering Services and College The liberalisation of African economies has stimulated entrepreneurship in Africa over the past 20 years. Governments play a critical role in graduating small enterprises from informal businesses to formal business and need to enable them to access finance easily.

01/06/2012 16:40


14

AFRICA CONNECTIVITY

Africa connected As Africans embrace technology, a mindset that combines both the old and new is emerging, reports Alnoor Amlani FCCA

Looking back just 10 years, it is astonishing to observe the growth in mobile phone uptake and usage. In 2002, on the world’s poorest continent, fewer than 50 million mobile phones were active. The number had shot up to 620 million by September 2011 and is predicted to reach more than 735 million by the end of this year, according to GSM Association. That amounts to half the population, which is incredible enough, but the implications of such connectivity go beyond the figures, with each mobile phone in Africa often serving more than one

person. This means that in just 10 years Africa has gone from being a place where people could only use telecommunications after travelling great distances or spending a lot on a landline or radio call, to one where everyone is able to connect instantly and cheaply. It’s not just mobile phone uptake that’s changing Africa. Consider that there are already more than 100 million internet users scattered across the continent, connected to the rest of the world and each other (www.internetworldstats.com). Interestingly, almost half of the total

VIEW FROM: BOB COLLYMORE CEO, Safaricom The mobile phone has ushered in a revolution as important as the Industrial Revolution. The growth of social media has empowered citizens and forced governments and businesses to address issues immediately in order to stay relevant. Individuals and businesses are able to access real-time information that they need for their day-to-day lives and operations. In particular, M-PESA (Safaricom’s mobile money transfer service) has helped businesses to expand their reach to even the remotest parts. Businesses, especially small and medium-sized enterprises, transact electronically, increasing the speed of doing business.

AFRICA_connected.indd 14

are in Nigeria (45m), followed by Egypt (21.7m), Morocco (15.7m) and South Africa (6.8m). The internet is revolutionising Africa’s business communities, politics and societies thanks to the rapid expansion of cheap, crystal-clear connectivity through three undersea fibre-optic cables that circle the continent and replace radio waves. Already the price per megabyte of data in East Africa has dropped to less than 10% of what it was just a few years ago. That is why in 2010, according to BlackBerry manufacturer RIM, more than 15 million smartphones were sold in sub-Saharan Africa. With internet cost and mobility combination positively first world in these countries, this is creating all kinds of new opportunities. For example, this is now the most developer-friendly place in the world to create smartphone applications and test them on the market. For the accountancy profession, telecommunications advances mean that the information feedback loop between accountants and clients is tighter and faster. This in turn means that management has new opportunities to use more accurate and timely information to capture more income as well as to save costs, enabling more growth and wealth creation for the companies that embrace the technology. Improved connectivity offers time and cost savings in real-time financial data capture, processing and reporting. It also enables key processes such as sales, field and worker monitoring,

01/06/2012 12:28


15 new ways of working in remote office management, centralised but accessible accounting systems and real-time stock control, to name a few.

companies having to work hard to catch up and convince clients that the political issues would not affect connectivity in future. While this is not the only challenge in maintaining connectivity, it is the most difficult factor to control. Other challenges in keeping the network up 24 hours a day, seven days a week throughout the year include power fluctuations, shortages of skilled technical staff, terrain challenges, weather and cultural challenges. Despite these challenges, simply having high-speed connectivity at cheap prices creates the need to have more. When the network in Egypt was down people used landlines and a traditional modem as well as satellite technology to transmit images of military attacks on civilians. This precipitated the tipping point for the rest of the world, who added their moral weight to the Egyptian people’s

Shifting power All this means that Africans are now much more tightly connected to each other and to the rest of the world, and the result of this is a shift in power relations. Unconnected people are vulnerable and easily divided, but those who are connected are a force to be reckoned with. North Africa’s Arab Spring is a prime example of this, with protesters in Egypt, Libya and Tunisia better able to organise themselves. Growing reliance on new technology brings problems, too. During the political upheaval in Egypt the internet went down for weeks due to government interference. This affected the business process outsourcing (BPO) sector, with 06 03

39,954,140

(Approx. May 2012)

FACEBOOK USERS

05

AFRICA_connected.indd 15

12

01

10 08

04

11 13 16

07

09

Facebook market size comparison:

14 15

INDIA 45,825,620 TURKEY 30,678,300 UK 30,945,100 PHILIPPINES 27,088,320 Source: www.socialbakers.com

01 02 03 04 05 06 07 08 09 10

EGYPT 10,669,020 SOUTH AFRICA 4,583,480 MOROCCO 4,297,920 NIGERIA 4,133,900 ALGERIA 3,386,800 TUNISIA 2,974,940 KENYA 1,317,460 GHANA 1,192,480 D R CONGO 845,200 SENEGAL 667,820

19 20

18 17

02

11 12 13 14 15 16 17 18 19 20

ETHIOPIA 519,940 LIBYA 498,820 CAMEROON 475,380 TANZANIA 452,320 ANGOLA 391,320 UGANDA 391,080 MAURITIUS 308,260 MADAGASCAR 225,520 ZAMBIA 217,480 BOTSWANA 215,820

cause. The network in Egypt was reinstated hours after the unrest ended because the people demanded it back.

A new African? What seems to be emerging is a new kind of African who can be traditional and modern at the same time with no issues. The contradictions are everywhere and no longer abnormal. Priests use their laptops and smartphones to compose sermons and administer the activities of the church, while traditionally dressed Masai warriors routinely interrupt their long walks across the savannah to answer their cellphones. I’ve seen octogenarians using tablet computers to show their friends and family photos of their grandchildren, as well as playing them recordings of old cultural songs. As they swipe their fingers across the screen to ‘oohs’ and ‘aahs’, I wonder what African society will be like in the next decade. With the presence of high technology, Africa could completely leapfrog the industrial revolution and go straight to the information revolution. The continent manufactures precious little, importing the vast majority of finished goods consumed by its people while exporting its crude oil, minerals and agricultural produce. With the power of telecommunications, the middlemen who used the lack of information to profit will find it harder to operate. Already, corruption is being exposed faster because evidence is being digitised and transmitted and can no longer be hidden easily. Perhaps all Africa will do is manage its exports of raw materials better by using technology, forgetting completely about adding value and creating industrial machinery and buying instead from the Chinese using technology to maximise the purchase value by getting the best price and quality combination. Ultimately, the expansion of mobile phone and internet usage across the continent could serve as a tool to enable Africans to regain control of their resources. In this resource-challenged global environment, perhaps this will enable Africa to secure its future. Alnoor Amlani FCCA is an independent financial management consultant in East Africa, who writes regularly on social and business issues

01/06/2012 12:28


16

AFRICA PROFILE

Island fortunes Government minister Devanand Virahsawmy FCCA outlines the innovative policies of Mauritius and its plan to play a leading role in the development of sub-Saharan Africa Fellow members of ACCA can be found in many influential positions worldwide – and in many African jurisdictions they are often the backbone of financial and management best practice. That is certainly the case in Mauritius, where environment and sustainable development minister Devanand Virahsawmy belongs to the inner circle of prime minister Navin Ramgoolam. Virahsawmy is clear about the impact of Europe’s ongoing financial and economic malaise on his and other African countries. ‘The economic situation of the country has been affected by the slowdown of the world economy. The major impact is being felt on textile and tourism sectors which are basically export-oriented and Euro-centric,’ he says. He is however confident that the economic situation in Mauritius will improve this year and next. He is not worried about the island nation’s forecasted economic growth of 3.7% this year, as it is much better than that of many developed countries. ‘We are not comparing ourselves with Asian tigers in terms of economic growth. In light of difficult growth expectations in the eurozone, 3.7% is commendable and better than negative growth,’ he says. The main challenge for emerging and developing countries, he says, will be to tailor their economic policies to heed the risk of depressed demand in export markets, while maintaining control over the domestic economy: preventing growth from overheating; managing the growth in audits and accounting as companies grow and become more international; monitoring potentially volatile capital flows; and containing the renewed inflationary impact of rising energy prices. Virahsawmy adds that it is difficult to say whether 3.7% growth is sustainable in the medium to long term as it has to be assumed that oil prices will remain high. Moreover, with oil supplies potentially being disrupted

AFRICA_profile.indd 16

THE CV

2010–PRESENT

Minister of environment and sustainable development.

2006–10

Secretary general, Mauritian Labour Party.

2000–06

Assistant administrative secretary, Mauritian Labour Party.

1995–2000

Minister of public infrastructure.

1995–98

Minister of energy and water resources.

1984–95

Chairman, Fuchsia Limited.

1980–84

General manager, National Transport Corporation.

through the risk of military conflict with Iran, prices could soar higher. This year, Virahsawmy predicts that growth will mainly be driven by real estate activities (up 6.2%), financial services (up 4.8%), and transport, storage and communication (up 4.8%). As for tourism, this should grow by about 1.3% and export-oriented enterprises by 0.5%, although the construction sector will stagnate despite the growth in real estate values, along with the country’s important textile sector. However, Mauritius has one of the largest exclusive economic zones in the world. In addition, the UN last year approved the coordinates submitted jointly by Mauritius and Seychelles for jurisdiction over an area of continental shelf extending over almost 400,000 sq km. Thus Mauritius now has a total area of 2.3 million sq km over which it can exercise various economic rights. This is more than 1,100 times larger than its land mass – an area bigger than that of France, Germany, Italy, Spain and the UK combined. ‘From this economic background, the major challenge is to maintain growth at a reasonable level, encourage the inflow of foreign direct investment, create jobs and control inflation,’ Virahsawmy says. Long-term inflation challenges will include sustaining structural reform efforts, improving the targeting of social benefits and enhancing overall productivity through investments in physical and human capital. Virahsawmy is a key figure in the development of a national policy bearing the French name Maurice Ile Durable (MID) (sustainable island) – the country had French and British colonial masters and is as much Francophone as Anglophone. This sustainable development policy agenda is being jointly developed by a special commission within the Prime Minister’s Office and the Ministry of Environment and Sustainable Development. The government is now preparing a formal MID policy, strategy and action

01/06/2012 16:40


17

Bright forecast: tourism is expected to grow 1.3%, but real estate could top 6%

plan, with broad-based participation and consultation. International consultant Mott MacDonald has been appointed to prepare the plan, with the aim of a draft by July 2012 and implementation from 2013. The idea is that this costed plan will pave the way towards creating a green and sustainable economy within Mauritius. MID has a fivepronged theme: energy, economy, environment, education, and equity, known as the ‘5 Es’. Virahsawmy says the initiative is ‘an integral part of our sustainable development agenda to which the prime minister has given prime consideration as from 2008’. He adds: ‘This is being achieved by ensuring that all relevant ministries and other organisations play their role fully in promoting sound economic development within the framework of a national sustainable development agenda.’ The plan will also have a vigorous audit component to assess and manage sustainable development in Mauritius: ‘The process is being achieved through a multi-project approach, particularly by regular audits of all processes and use of resources with a view to ensuring their optimum use,’ he says. There will also be analysis and review of the

AFRICA_profile.indd 17

‘We are not comparing ourselves with Asian tigers. in the light of difficult expectations in the eurozone, 3.7% is commendable’ performance of each economic sector, enabling them to be prioritised in terms of future development potential. With such forward-looking policies, Mauritius certainly has the ambition to play a leading role within the region, and particularly in sub-Saharan Africa where it has acted as a hub for investments. Virahsawmy says that Mauritian entrepreneurs have the capability to play this role, with the government acting as facilitator. Areas of interest for such investments include renewable energy.

International focus The goal is fostering trilateral deals, involving European and Asian countries (especially China and India, with which the country has strong cultural ties) financing technological transfers and investments in mainland sub-Saharan Africa, using Mauritius as a base for such arrangements. ‘We have the ambition of housing regional headquarters of well-known multinationals. Indian and African leaders have agreed to increase bilateral trade to US$90bn by 2015 which is a big opportunity for Mauritian entrepreneurs and Mauritian banks with strong financial fundamentals,’ says Virahsawmy. He says food production is also an area where such cooperation could work: Mauritius

has acquired land concessions in Mozambique, the Democratic Republic of Congo and if necessary in Madagascar for rice cultivation. Under these arrangements, Mauritian territory would be used to develop seedlings, while final production would be carried out on the African mainland. There are also good outsourcing prospects for the Mauritian services sector. Banking, judicial services, business process outsourcing, investment funds, insurance and management work could be offered in several languages (Indian and Chinese languages as well as French, English and Mauritian creole are spoken on the island) to tap European markets. Such services could be relocated to the African mainland ‘where there are real opportunities’, Virahsawmy says. Right now, he says, accountancy firms work in many African countries providing services to local companies and multinationals to help restructure their businesses. ‘Africa is moving fast with its economy growing positively. Local entrepreneurs must be prepared to take the challenge and be the first to take advantage of the business and investment opportunities that the African continent is offering,’ he says. Villen Anganan, journalist

01/06/2012 16:41


18

AFRICA SUSTAINABILITY

Sustainability challenge A paradigm shift in strategy for sustainable economic development is needed if Africa is to meet the challenges of population growth, climate change and food insecurity Sustainable growth in Africa outside South Africa faces the challenges of strong population growth, commodity price volatility, climate change and food insecurity. The continent’s current population of a billion people is set to almost double by 2050. Conserving natural resources while ensuring that economies expand to generate jobs and fund social provision for an increasingly urbanised population will be a difficult task for governments over the coming decades. Africa’s booming cities, from Lagos to Luanda and Kinshasa, are already failing the majority of their citizens for housing, sanitation, school provision and health care. Environmental disasters, from oil spill devastation in Nigeria’s Niger Delta to deforestation across Kenya, already highlight the cost of Africa’s economic gains. Rising populations also pose a threat to food security. Climate change and the increased risk of drought and uncertain weather are predicted to hit Africa’s agriculture the hardest. The short-term outlook is not encouraging. Up to 35% of people in Niger, Mali, Burkina Faso, Chad and Mauritania are currently at risk of hunger because of drought, according to the UN’s Food and Agriculture Organization. Indeed, a quarter of all the people who are undernourished in the developing world are in sub-Saharan Africa. The future health of Africa’s

agriculture sector is critical. It is the largest employer in Africa, accounting for between 20% and 40% of gross domestic product in most sub-Saharan African countries and is the main source of income for 90% of Africa’s rural populations. Climate change and land reform policies will also be key.

Model for growth Dr Alan Knight, a member of ACCA’s Global Forum for Sustainability, says: ‘Sub-Saharan Africa needs more than inward investment to develop. There is and has been significant inward

‘SUB-SAHARAN AFRICA NEEDS MORE THAN INWARD INVESTMENT… IT MUST REFORMULATE AN ACCOUNTABLE OR RESPONSIBLE CAPITALISM’ investment over the last 40 years as well as significant inputs of donor dollars. Sub-Saharan Africa needs to fundamentally reformulate an accountable or responsible capitalism and wean itself from the West-serving policy conditions foisted on it by some international agencies.’ Though sub-Saharan Africa is expected to post economic growth of around 5% this year, the fortunes of most African states will depend largely on the international prices of minerals, oil, gas and agricultural products. Lack of regional integration between

VIEW FROM: RODNEY NDAMBA ACCA Founder, Centre for Environmental Accountability, and lecturer in accounting, University of Zimbabwe Businesses around the world are increasingly beginning to appreciate the urgent need to operate in an economically, environmentally and socially responsible manner. Many companies should be wondering about the implications of the COP17 agreement and resolutions. The Rio+20 conference will also be a defining moment for business practices and performance measurement. Businesses that have already embraced sustainability and climate change could see emerging business opportunities and competitive advantages.

AFRICA_sustainability.indd 18

African countries and problems such as corruption and weak institutions pose challenges to sustainability. Around 70% of sub-Saharan Africa’s exports are commodities, led by minerals and oil and gas. A temporary downturn in Chinese minerals imports last year had an adverse economic impact on key exporters such as Zambia, which saw its copper export values slump. The problems with sustainable growth have been taken up by Nigeria’s central bank governor Sanusi Lamido Sanusi, who is calling for an overhaul of development strategy policy.

Ironically, however, issues of sustainability also risk being sidelined by Africa’s short-term economic success. Africa’s economic growth in 2011, excluding South Africa, was 5.9%, making it one of the fastestgrowing developing regions, the World Bank estimates. The growth was led by oil states Nigeria and Ghana and by new regional coal exporter Mozambique. The bank’s latest poverty estimates also show that the number of people living in poverty in Africa has declined for the first time. Capital inflows into sub-Saharan Africa rose by US$8bn in 2011 from the previous year to US$48.2bn. But to make this growth stick, political reform will also have to be enacted to support sustainability. Africa’s democratic credentials have undoubtedly improved in the past decade and civil and regional wars are on the decline. However, deep flaws remain that will need to be addressed by Africa’s leaders. George Stone, journalist

Background picture: the polluted waters of Bodo Creek, Niger Delta

01/06/2012 16:41


ACCA offices*

* * * * * * *

ACCRA Ghana +233 (0)302 731 735 info1@gh.accaglobal.com

* * * * * * * *

+251 115 159533 info@et.accaglobal.com +265 995 377200 info@accaglobal.com

BEIJING China +86 10 65186122 accabj@cn.accaglobal.com

BRUSSELS EU +32 (0)2 286 1137 info@accaglobal.com

+40 (0)31 780 0012 info@ro.accaglobal.com +86 28 8620 2085 info@accaglobal.com

5678 irelandinfo@ie.accaglobal.com

COLOMBO Sri Lanka +94 (0)11 2301920 info@lk.accaglobal.com DUBAI UAE +971 (0)4 391 5451 info@ae.accaglobal.com

*

*

* *

KIEV Ukraine +38 (044) 498 34 50 info@accaglobal.com

info@my.accaglobal.com

KUCHING Malaysia +6 (0)3 2027 4756 info@my.accaglobal.com

KUALA LUMPUR Malaysia +6 (0)3 2027 4756

info@accanigeria.com

LAHORE Pakistan +92 (0)42 111 22 22 75 info@pk.accaglobal.com

info@accaglobal.com

LUSAKA Zambia +260 (0)1 223810 info@zm.accaglobal.com

info@accaglobal.com

MOSCOW Russia +7 495 737 5542 info@ru.accaglobal.com

* *

* *

LAGOS Nigeria +234 1 461 6269

LONDON UK +44 (0)20 7059 5000

MACAU China +853 8294 6708

MUSCAT Oman +968 2449 3686

*

info@om.accaglobal.com

NAIROBI Kenya +254 (0)20 2730728 info@ke.accaglobal.com

info.usa@accaglobal.com

PHNOM PENH Cambodia +855 (0)23 991 676 info@kh.accaglobal.com

*

*

* * *

info@sg.accaglobal.com info.ca@accaglobal.com

NEW YORK US +1 212 310 0105

*

PORT LOUIS Mauritius

PORT OF SPAIN Trinidad and Tobago +1 868 662 4777 info@wi.accaglobal.com

PRAGUE Czech Republic +420 226 223 000 czechrepublicinfo@accaglobal.com

accash@cn.accaglobal.om

HO CHI

KARACHI Pakistan +92 (0)21 111 22 22 75

info@pk.accaglobal.com

+230 466 0030 info@mu.accaglobal.com

HANOI Vietnam

JOHANNESBURG South Africa +27 (0) 860 02 10 10

KAMPALA Uganda +256 (0)414 251328 info@ug.accaglobal.com

* * * * * * *

* *

HONG KONG China +852 2524 4988 info@hk.accaglobal.com

ISLAMABAD Pakistan +92 51 111 22 22 75 info@pk.accaglobal.com

*

GLASGOW Scotland

HARARE Zimbabwe +263 (4)744 524 745 880 info@zw.accaglobal.com

MINH CITY Vietnam +84 (0)8 3910 3488 info@vn.accaglobal.com

info@acca.org.za

DHAKA Bangladesh

GUANGZHOU China +86 20 8755 7932 accagz@cn.accaglobal.com

+84 (0)4 3946 1388 info@vn.accaglobal.com

*

CHENGDU China

DUBLIN Ireland +353 (0)1 447

GABORONE Botswana +267 318 8756 info@bw.accaglobal.com

+44 (0)141 534 4141 info@accaglobal.com

BLANTYRE Malawi

BUCHAREST Romania

CARDIFF Wales +44 (0)2920 263 657 wales@accaglobal.com

+88 02 8824672 info@bd.accaglobal.com

ADDIS ABABA Ethiopia

*

SHANGHAI China +86 21 6391 6777

*

SHENZHEN China +86 (0)755 3395 5710 accagz@cn.accaglobal.com

SYDNEY Australia +61 (0)2 8999 9080 info@au.accaglobal.com

*

SINGAPORE Singapore +65 6734 8110

TORONTO Canada +1 416 966 2225

WARSAW Poland +48 (0)12 395 7090 polandinfo@accaglobal.com

*

ACCA HEADQUARTERS 29 Lincoln’s Inn Fields, London, WC2A 3EE, UK +44 (0) 20 7059 5000

AFRICA_innerspread.indd 17

12/06/2012 12:44


AFRICA ISLAND FORTUNES

INTERVIEW: MAURITIUS ENVIRONMENT MINISTER SUSTAINABILITY THE CHALLENGES EMBRACING CONNECTIVITY

AFRICA_coverback.indd 1

01/06/2012 12:29

AB Africa – Special edition (2012)  

Accounting and Business Africa – ACCA Special edition – June 2012

Read more
Read more
Similar to
Popular now
Just for you