Africa's potential is exponential, says CHH CFO, Seithati Bolipombo
“Transformation won’t happen by osmosis or natural selection because at its core and at its foundation, it is a people thing. It comes down to behaviour and is a decision that people make,” says Seithati Bolipombo, CFO of Chancellor House Holdings (CHH), a privately held investment holding company founded in 2003. Seithati is extremely passionate about the subject of transformation and opines that while we’ve made good strides, there is still plenty of room for improvement. She also thinks we need to be prouder of our African heritage: “We need to elevate the pride of the African identity. The more globalised and Westernised we become, the more anything that was founded or established in Africa seems to have less of a reputation than the equivalent founded outside the continent. In business and in civil society, the African identity has to be prioritised and celebrated.” How did you get into finance? “This wasn’t always the plan! When I was in high school I actually wanted to work with young people. I had a chat to one of my teachers, who was like a mentor to me at the time. She said to me, ‘The world needs more people with strong values in critical pillars of society than it does within social services. You need people with the right heart and mind to be making those decisions in terms of where resources go’. She encouraged me to look into finance.” What do you most enjoy about the industry? “You get to shape the economy. Your area of financial excellence contributes to a bigger economic landscape, which really determines the growth of the country and therefore how it benefits its people.” In your opinion, what are the most important elements or considerations when devising a business strategy? "Every business exists for its customers or its clients. That’s first and foremost the thing you’ve got to preoccupy yourself with; being obsessed about understanding the people for whom you exist as a business, their needs, their demographics, and what keeps them awake at night. Then you have to consider what solution you are providing and how you meet their needs. My philosophy is that business concepts don’t fail due to a lack of either resources or the right people or staff. I believe that business concepts fail due to an inability to bring value to the table of exchange. I believe that people are willing to spend money as long as the solution that is being provided is a valid and valuable one. That’s the biggest element of business strategy for me.” What role do you think the CFO plays in the strategic vision of a company? “As CFO you may be the ’bean counter’ but you should also able to add value to strategy and decision-making based on numbers, so that business decisions are not made on gut feel or emotion. The strategy has to be based on strong strategic and financial fundamentals.” “In formulating strategy, management undertakes a critical assessment of the industry the business is in, as well as its competitors. It is crucial that this assessment is also based on financial evidence too. If it comes down to a choice of two paths the company could take, it’s a question of what do the numbers say. I’m particular about the numbers because I feel they’re objective to a certain extent – as long as we’re not cooking them.”
"A strong CFO also helps to clarify issues for the management team, provides direction for decision-making and is able to bring everybody into the same frame of mind and understanding of issues."
"The trend over the past 10 or so years has also seen CFOs start to play a critical role in compliance, corporate governance and risk management issues. The more I speak to my peers, the more I see another trend emerging where CFOs are no longer just reporting on historical numbers. Next generation CFOs are looking for ways to almost pre-empt those numbers to drive decision-making before the event or the financial year end has come to an end. Almost to say, what is it that we would like to achieve and what should the numbers look like and what should we be doing as a management team to achieve the kind of financial results we want to see? I think that's going to be the next the challenge among all these currently."
CHH has investment interests in various industries across Africa. Tell us about your experience of doing business in Africa.
"The more you move outside of the SADC region in particular, the more different the business environment becomes. One of the first challenges is the different regulatory environments. The manner of doing business is also different; there are cultural and somewhat intangible nuances that you can't really quantify, and if you get that wrong you can compromise or even lose a large business prospect. Language also becomes an important consideration, particularly in the Francophone countries."
"Most African countries, much like ours, are focussing more and more on promoting investment that is inclusive for their own people. So a lot of time when we speak to the decision-makers in the various countries the message is the same: they are willing and open for investment, but they need us to ensure there is participation from local companies in our supply chain or at an investment level or so on. It's important, especially because we know our own history and the strides that we are trying to make in terms of BB-BEE and transformation, so we have a strong appreciation of that."
"Funding considerations for projects in particular becomes a crucial element for investing in other African countries. For instance, if we launch a project with an international partner, funding may be raised in US dollars or Euros, but the repayment on that funding is based on the local currency, which is much weaker. Currency conversion affects returns and profitability and is something we've had to strategise around and for which we've had to find innovative solutions."
What potential do you believe Africa has, and what does the continent most need in order to realise this?
"The potential for this continent is exponential, especially if you think about Africa's population, its land capacity, both the known and unknown resources in terms of minerals and commodities, etcetera. In terms of realising this potential, I think each African country needs to look at its history and the context in which it was founded. We are coming from an apartheid system that resulted in the majority of the population not being able to participate in the economy. The impact of that is that we have a growing population but the amount of skills competencies does not increase proportionately. So for South Africa, we have to consider ways in which we can promote participation in the economy. In the same way, each country has to design and engineer its own growth given its history and legacy."
"Competence becomes crucial in this exercise. Once we start conversations around realising potential, we have to know what it is that needs to be done. Leaders and politicians in Africa have to prioritise the appoint of qualified individuals in strategic positions. Majority rule has to be balanced with competence and professionalism. Competent appointments build confidence; you can build a national (and continental) strategic plan that investors will be willing to invest in."
"Lastly, we need to promote pride in the African identity. The more globalised and Westernised we become, the more anything that was founded or established in Africa seems to have less of a reputation than the equivalent founded outside the continent. In business and in civil society, the African identity has to be prioritised and celebrated."
Let's talk about transformation. How are we doing?
"Legislatively it's a step in the right direction. Putting it into a regulatory framework such as BB-BEE and AA, that's a step in the right direction. It would've been ideal if we could've said to 'Business South Africa, you know the issues we have, please transform your businesses, thank you for your cooperation,' but chances are slim that 'Business South Africa' would act accordingly."
"Transformation won't happen by osmosis or natural selection because at its core, it is a people thing. It comes down to people and behaviour and the decisions that people make. Therefore, you can't afford as a country or as a government to leave it up to the individual decision-makers to make the right decisions to move the country forward. Having a framework that holds every industry or sector accountable is a step in the right direction. We are making good strides."
"I look at myself as an example. I didn't grow up in a particularly advantaged environment. I was the first of my family to go to university, I couldn't afford an education but I still got a degree. When I qualified it was because I was afforded the same opportunities as any other young person. Previously, I would have been excluded from this process not because of my abilities but simply because of the colour of my skin or the name on my ID. Now, as a professional black female, I can decide for myself where I want to work, how I want to work which environment I want to work in, and how I want to make my contribution to making the country a great one. But is there still room for improvement? Yes. Should we keep refining the legislature as time offers its lessons? Definitely."
"The BEE of 1994 and the BB-BEE of 2016 look different and should look different. The more inclusive the framework, the better for business and for the nation."
What does the future hold for you?
"I love the environment I'm in right now. I'm looking forward to creating value and helping the business to grow its assets and strengthen its footprint in Africa. I love my country and this continent. I don't see myself leaving it to go seek greener pastures elsewhere. I do believe that a global perspective is always important, so in my future plans is an international MBA to augment my ability to enhance local business while understanding international dynamics and so on. I definitely am proudly South African and proudly African."