Four top finance bosses reveal the reasons for their success on the continent
What does it take to be successful in the rest of Africa? We asked four CFOs who were nominated for the 2016 CFO Awards to share some tips. Here’s what Bikash Prasad from Olam International, Johan Geel from Afgri, Mohammed Abdool-Samad from Illovo, and Osman Arbee from Imperial Group had to say on the matter. Bikash Prasad (right): look at the long term Bikash Prasad has quickly moved through the ranks and last year became CFO for Africa and the Middle-East at Olam International, a global agri-business operating from seed to shelf. Bikash has been a long-standing supporter of CFO South Africa and the panel of judges voted him as winner or the 2016 Moving into Africa Award, which he received out of the hands of Standard Bank’s CIB CFO Luvuyo Masinda on 12 May 2016. We asked him what it takes to be successful in Africa. “Look at the long term. You might have challenges in the short term, with the global economic slowdown and the slowdown in China impacting the continent, but the long term is looking very bullish and positive.” “To operate in Africa, you have to be a noble corporate citizen. You cannot be non-compliant. You need to really believe in sustainability and get a license from the community you want to work in, not just an official license from the government you are dealing with. We hardly ever run into any trouble because of that approach. Recruiting and developing talent is also crucial.”
"You can see the success of the way we work in how we have grabbed growth opportunities in 2015. Where big giants from South Africa struggled in Nigeria, we have been very successful, as we understand our businesses and have finance visibility. Unless we have a good understanding of the whole picture, you can never be successful, not only in Nigeria but in any African country."
"We operate in 23 African countries with different languages, cultures and accounting systems. That means I need a good mix of nationals and some expats. I like to give opportunities to local African talent despite reservations from various quarters due to mindset issues. I personally go to ACCA and CPA Campuses in Kenya, Cameroon, Tanzania and Uganda and recruit qualified accountants as Africa finance trainees who are then groomed to become managers. This experiment is hugely successful and helped our localisation drive, building a sustainable and robust structure."
"Compliance requirements are increasing a lot, partly because many African countries are implementing best practices from the G20. That is why we have created centres of excellence for taxation, macro-economics and francophone accounting. We are in constant conversation with the Big Four to understand the key trends on the continent, and understand which tax regimes are the most well-structured and efficient, so that we are geared towards the changing tax environments in each of the economies in which we operate."
"We have also created an African Intelligence Unit. CEOs in countries and regions now have a one-stop-shop for all their data requirements, whether it is economic outlooks, key trends in agriculture or any other data and analytics they need. The unit is involved in research and development and works closely with consultants, following global and African trends."
"Thanks to our own data collection, we are ahead of the curve to embrace the realities in the market and we can tweak our action plans accordingly. We also use our relationships with governments, NGOs and industry bodies. We engage small and marginal farmers on the ground throughout the year, which gives us competitive advantage compared to competitors who only participate during the trading period."
Johan Geel (left): don't stay away
Johan Geel moved from a COO to a CFO role at Afgri in 2012. He was nominated for the 2016 CFO Awards and during his interview with the panel of judges he spoke passionately about his vision for the rest of Africa. Here are his tips:
"Find trustworthy people, work with the correct information, do proper research, go there and make sure of things yourself - don't stay away. Before you start spending any money, make sure your information is correct and confirm this with external parties."
"Understand your market: some information you get can be old. Understand the infrastructure locally and make sure off-takers will be there. It will help if you can create your own value chain. Keep the right staff and skills and realise that people think differently."
Mohammed Abdool-Samad (right): localise your FDs
Mohammed Abdool-Samad was shortlisted as a nominee for the CFO Awards in both 2015 and 2016. He has been the group FD at South Africa's biggest sugar producer, Illovo, since 2011 and is very active in other African countries like Tanzania and Zambia. We asked him what he has learned there.
"There are massive opportunities and with that comes risk, so you need to understand the landscape and do a bit of a risk assessment. The risks include currency, political stability and the regulatory environment. But still, there are great opportunities across the continent. Just make sure you are as local as possible and don't think you can parachute your leadership in."
"You can read a lot of research on African markets, but the danger is getting lost in the detail. That is why I have weekly talks with the FDs in our African operations, often about people, markets or regulations. I also visit the operations roughly every three months and engage extensively on the ground. People on the ground are far more candid, so I make sure I talk to them. We get help from advisors, but I don't choose a firm of advisors but individuals that I trust and have the requisite experience. I pick and choose experts for IFRS, transfer pricing, tax, etcetera. Admittedly, it takes a while to build up a network."
"It has been a journey over four years to localise our FDs in Africa, which is key to building a sustainable finance function. Today, five out of six FDs are top notch local FDs that came from our own business. It has been a journey, but it turned the whole face of the business around."
"I had the advantage of my Anglo years, where the local model had worked really well. We are now starting to see talent in the business develop, not just in Finance. The governments of the countries we operate in are proud of us - we are now seen as a local business, which certainly helps with managing different stakeholders. You cannot quantify that, but my life as a CFO has definitely become a lot easier."
Osman Arbee (left): do your due diligence
Imperial Group CFO Osman Arbee won both the Strategy Execution Award and the High Performance Team Award at the 2016 CFO Awards. Elsewhere in this magazine, the seasoned leader shares the story and lessons of his career. Here he reveals some of his insight into the continent.
"Develop your own knowledge base on local operations, get the sellers to stay in for at least three to five years with profit warranties while you get to know the business, do detailed due diligence on tax, legal, accounting and business issues."
"Ensure you have robust processes to ensure no transfer pricing is happening, tax is paid to the correct jurisdictions and understand local currency remittance and other local statutory requirements."
"Due diligence has made us successful. We don't rush into a big deal, but take 12 to 18 months. We need to understand the thinking of the owners, the needs of the country and the regulatory environment. I am also quite pedantic about transfer pricing."