Bonface Ndawala - Group Financial Control Executive Globacom: `Key issues in the industry of finance at the moment would be the impact of the debt crisis in Europe and America`
The fastest growing telecommunication company in sub-Saharan Africa, Globacom provides world class cutting edge technology and designs telecom solutions to suit the needs of various publics, irrespective of size. As a company, Globacom recently made history as the first single company to build an $800 million high-capacity fiber-optic cable, known as Glo-1. It is the first successful submarine cable from the United Kingdom to Nigeria; and it will decrease telecom costs and provide very reliable bandwidth to all the cities connected to the cable.
Owned by the Mike Adenuga Group, Globacom is the market-leading mobile service provider in Nigeria. Globacom also operates in the Republic of Benin and Ghana.
Bonface Ndawala joined Globacom as the Financial Control Executive for the group in April, 2012. He has been nicknamed ‘The Pan African Executive' courtesy of his high-level experience in both the Finance and Telecom industries over the past 12 years. Prior to joining Globacom he was Financial Control Executive at Cell C, South Africa , at the same time he served as Chairman of the board of Directors for Malswitch in his native Malawi as well as chairman of the finance and procurement committee of the Celcom board, a third mobile operator in Malawi. He has been Regional Financial Controller at Zain Africa based in Nairobi responsible for operations in Kenya, Tanzania, Uganda and Madagascar, and has occupied various Executive level finance positions at Zain (East, Central and West) Africa. Amongst other qualifications, he is a Fellow of the Chartered Association of Certified Accountants – FCCA and a graduate of Wits Business School, and is a Certified Public Accountant – CPA.
Please introduce your company to us.
“Globacom is the second biggest Mobile operator in Nigeria and also has operations in Ghana and Benin. Amongst many remarkable achievements, some of which you already highlighted above, Globacom revolutionized the telecoms industry by being the first to introduce the per-second billing option, 3G service.
We provide all round world class telecommunications solutions at a cost effective price while improving and setting the pace on GSM and technology, to mention a few.”
Please introduce yourself, and kindly give us a brief walk down the road to the position you are holding now.
“I am Bonface Ndawala, of Malawian origin. I have had the privilege of working in a total of nine African countries, in different capacities, over the past fifteen years. I have worked both at operating company level as well as at group level. I started out my career as an auditor at Deloitte and Touché in Malawi in 1997. After three years in Audit, I moved into the automotive industry where I worked for a company called Automotive Products, also in Malawi, for two years.
Next I joined Celtel Malawi in 2001 for five years before moving on to Celtel International, and was posted to Madagascar as Financial Controller. Then I was appointed as the Regional Financial Controller for East Africa covering Tanzania, Kenya, Uganda and Madagascar. Following that, I moved to West Africa as the Regional Head of Accounting and Financial Systems covering Ghana and Sierra Leone.”
At what point did you move to South Africa to be CFO?
“I moved to South Africa after working for Zain Africa for over eight years at the end of 2009. I joined Cell C as Executive Head for Financial Control and Credit Operations after being convinced of their long term strategic vision. This was more exciting to me than my previous employment where I felt I had pretty much achieved everything that I had wanted to, and going to a mature first world economy like South Africa was quite attractive. I held that position for two years before I joined Globacom in my current capacity. The attraction to come to Nigeria was to experience the challenges of Africa’s biggest market, and it has not disappointed.”
The telecom industry in Africa is fast becoming at par with the rest of the world. How would you say the CFO has contributed to this impressive development?
“CFOs have been instrumental in bringing about the mobile revolution in Africa by translating the wishes of the shareholders and the vision of CEOs into some of the most aggressive business plans the industry has ever seen. In the first years in the early 2000s it was easy for mobile companies to pretty much ignore the costs as the growth of their top line seemed to continue year on year due to the fact that penetration rates in most countries were low. Indeed we saw some operations in the poorest countries having EBITDA achievements in millions of dollars as a result of this massive growth.
In later years towards the end of the last decade we have seen more players come into the markets and competition stiffening, so that it was no longer a question of relying on growth of subscribers and thereby growth of revenues that mattered. Rather, cost optimization had to come into the picture, and so operators now started to manage their costs, and this also on the backdrop of saturation that has come into quite a few markets.
CFOs have now been called upon in the competitive environment that now exists to find ways in which they can assist their respective operations, maintain competitiveness by trying to understand better subscriber behavior and from that, putting up predictive models that would assist in the planning process from year to year and also products and services that would appeal to the subscribers. Indeed, understanding subscriber segmentation more, the era of commercial finance is born!
At the same time CFOs have been keen to ensure that their entities keep whatever they have and not lose it needlessly through fraud or abuse, and thus Revenue Assurance has become extremely important. The objective is now value retention by ensuring you have a very strong procurement section that will buy goods and services at as low a price as possible whilst maximizing what the entity is earning from customers by understanding subscriber behavior patterns as regards expenditure on the services that mobile companies provide, and ensuring as little leaks as possible out of the value chain.”
What are the key developments and issues in the industry of Finance?
“Key issues in the industry of finance at the moment would be the impact of the debt crisis in Europe and America and indeed the impending fiscal cliff in the U.S. and the uncertainties that come with that. Even though these events are happening outside our shores, they affect Africa as clearly the spending priorities in those countries have changed, and this affects the prices of the exports from Africa. Investment into Africa is also affected as a result of lower demand for Africa’s exports.
Regulation is also an issue that cannot be overlooked as governments across the West have tightened rules in the financial sector to avoid getting into another catastrophic financial crisis as the world witnessed in 2008. This in turn affects demand from the West for African products, ultimately affecting investment into the continent as above.”
Do you think the position of the CFO should remain untouched in a company, even in cases of staff reshuffle, mergers, acquisitions, etc.? If yes or no, why?
“No, I do not think so. Inasmuch as stability is required, CFOs cannot and should not be above scrutiny. Their roles have got to be reviewed in line with the objectives of the new venture, because if it is established that they were part of the problem in the old venture, the appropriate measures should be taken with them, as with any other staff.”
How do you think political issues in a country affect the Finance Industry in that country?
“Well, politics affects the economy in a lot of ways. I will give you an example of Zimbabwe, when President Robert Mugabe allowed the so-called war veterans to take over white-owned farms without compensation not only did crop production decline as the war vets obviously lacked the skills to farm in the same way as the white famers, but there was also international condemnation of the Mugabe regime that led to sanctions that crippled Zimbabwe for a full decade. Only now Zimbabwe is coming up in some kind of a recovery, but they had to do away with their own currency in favor of the dollar, even though the regime does not see eye to eye with the Americans. They couldn’t even sell their diamonds, which were now branded as ‘blood diamonds’. In most countries in Africa the government is the biggest consumer of goods and services and so if they have a problem, the whole economy feels the pain.”
20 years ago, technology was significantly less developed than it is today. How do you think the coming of internet, social media, etc., has impacted the job of a CFO?
“The coming in of the internet and technology has made the life of the CFO a lot easier as information is fairly easy to gather. International Accounting standards, for instance, are readily available online and so the CFO can always be sure that that’s the most up-to-date info available.
Secondly, computer software has made it possible to have very good accounting packages that track transactions across the organization. These assist in ensuring completeness of transactions as well as being readily available for auditors and management use. The ease with which info can be retrieved enables management to make quick and timely decisions, as it is available at your fingertips.
Social media has also impacted the CFO’s job as they are able to factor into their plans what they see in form of reactions on such platforms. For instance in South Africa, Facebook and Twitter comments have forced mobile networks to spend more money on rectifying glitches in their billing systems to avoid being taken to task by the regulators. Indeed ICASA, the regulator in SA, takes into account such issues in determining which mobile networks are failing their customers and takes them to task by imposing penalties for poor service.”
You have been a CFO in South Africa, East Africa and West Africa. How does the finance industry in South Africa differ from the East and West African countries?
“South Africa is a mature and first world economy where everything is well integrated, which is not the case in East and West Africa. Also in South Africa, the mobile penetration is 120%, meaning that there is saturation. Everyone in the economy who can own a mobile phone now has a mobile phone and so if you have to acquire new customers, it would mean that you are getting them from someone else, hence growth in this environment is extremely tricky and Value Added Services (VAS) have become key for mobile networks to increase their revenues. In West Africa you still see growth from new acquisitions of subscribers that were not on any networks before.
One very significant issue is the availability of credit to the population. In South Africa where this is well regulated, you get lots of people having access to and making use of such credit whilst in East and West Africa where the credit industry is not that well regulated, you don’t that see many banks or organizations giving credit at all. Instead you see businesses giving out credit only when backed up with bank guarantees which themselves are backed by some kind of collateral. This limits the number of people who can access credit, as banks play it safe due to the potential risk involved. Indeed to access postpaid mobile services, subscribers are often asked to pay a deposit which is higher than their monthly limit. This practice is unheard of in South Africa.”
What major changes in the job of a CFO do you foresee in the next, say, five years?
“The CFO’s job is gonna get more complicated in the future as more and more information becomes available to the public, thus reducing the level of predictability of an entity’s customers. This will mean that shorter planning cycles will become necessary as it will be very difficult to predict customer behavior in the medium to the longer term due to the varying information that the market is digesting, thereby making it very tedious and difficult to forecast the behavior of customers.
Another thing is that as margins are getting thinner and thinner, CFOs will have to find ways to optimize costs to ensure that their businesses remain profitable and competitive. The main issue here is that today’s consumer is becoming more and more sophisticated and is demanding more and more for the same amount, as they are aware that they have choices – if one company does not accommodate them they can move on to another. Therefore businesses will have to get more creative, and technological advances that cut costs will be demanded more and more by CFOs if businesses are to survive. It is thus gonna get really stressful to be a CFO in the coming five years as a result. “
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