Monday, April 22, 2024

Delloite CFO Survey taps into mood of Botswana business

Chief Financial Officers from Botswana companies, included for the first time in the 2013 Deloitte CFO Survey, are upbeat about the health of the corporate sector, with 61 percent reporting improvement in their companies’ performances over the last year.

Botswana CFOs are not only happy with present business conditions; they are optimistic about the outlook with 77 percent expecting better performance in 2013 and 83 percent forecasting higher performance in 2014.

CFO sentiment on the outlook for the economy is likewise robust. After growing at 3.7 percent in 2012, the economy is forecast to rise by 4.7 percent in 2013, by 5.4 percent in 2014 and 5.6 percent the year after.

“We have been running the survey for six years across Africa,” said Rodger George, South Africa CFO Progamme Leader and Director of Delloite Consulting.

“The surveys give an insight into how the CFO’s mind works and what they think about the economy,” said Max Marinelli, Managing Partner of Deloitte Botswana.

CFOs were also surveyed in Malawi, Namibia, South Africa and Zambia. The survey taps into the underlying mood of CFOs and seeks to gauge what the drivers are which shape both their behaviour and strategic choices.

According to the 2013 Deloitte CFO Survey, no CFO expects to see a deterioration in performance by 2015 and 92 percent believe that their company will show growth in that year.

On the one hand, some 63 percent of CFOs think interest rates in Botswana will remain unchanged, with the expectation of a small interest rate hike in 2014. On the other, 56 percent believe the Botswana Stock Exchange (BSE) stock market prices reflect fair value.

“The Pula is expected to depreciate somewhat relative to the US dollar over the next three years, although to a lesser extent than expectations for the current year,” notes the survey.

For the year ahead, businesses are forecast to adopt a mix of growth and defensive strategies, with caution being the underlying factor. According to the survey, some 61 percent of CFOs will be optimisng operations, 56 percent rationalising them, and 39 percent consolidating them.

However, on the positive side, CFOs will look to increase their focus on growth through customers, channels or products (65 percent), brand equity (33 percent) and revenue from Africa and other emerging markets (31 percent).

Sluggish growth in South Africa, as well as the effects of a global economy still recovering from recession, is holding back growth for Botswana businesses.

“As with neighbours Namibia and South Africa, a shortage of key skills is a one of the most pressing concerns facing Botswana businesses, with 52% placing this in their top three industry concerns,” notes the survey.

However, this was not an issue for CFOs in either Malawi or Zambia. Generally, CFOs across southern Africa rank competiveness of the local market as a key issue. Some 39 percent of Botswana CFO’s found this problematic.


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