african business outlook part of the global business outlook

African Business OutlookPart of the Global Business Outlook

A joint survey effort between

Duke University,The South African Institute of Chartered Accountants

and

CFO magazine

African Business Outlook Duke University / SAICA / CFO Magazine Jun 2013 1

Top Internal Concerns for African CFOs


1. Ability to maintain margins

2. Attracting and retaining qualified employees

3. Working capital management

4. Maintaining morale/productivity

5. Ability to forecast results

6. Balance sheet weakness

7. Supply chain risk

8. IT governance

9. Counterparty risk

10. Protection of intellectual property

11. Data security

12. Pension obligations

13. Cost of health care

Top External Concerns for African CFOs


1. Consumer demand

2. Price pressure from competitors

3. Global financial instability

4. Input costs

5. National employment outlook

6. Currency risk

7. Financial market regulation

8. Foreign competition

9. Cost of fuel

10. Credit markets/interest rates

11. Inflation

12. Government budget deficit

13. Corporate tax rates

14. Environmental concerns

Additional Important Concerns for African CFOs


1. Labour instability 71.0%

2. Government Service Delivery 58.0%

3. Electricity supply 50.7%

4. Education/Skills pipeline 50.7%

5. Policy uncertainty 46.4%

6. State owned enterprise management 13.0%

7. Implementation of NDP 10.1%

Notes: Percentage of CFOs who ranked item in top 3 from this list of concerns.


Product Prices

Jun 2012 Sep 2012 Dec 2012 Mar 2013 Jun 2013

-5%

0%

5%

10%

15%

Latin America United States Europe Asia

Africa

Notes: Presented data are the mean value for each region or country.

Forecast of % change over next 12 months

Revenue




-5%

0%

5%

10%

15%

Latin America United States Europe Asia Africa


Capital Spending



-5%

0%

5%

10%

15%


Africa




Notes: Presented data are the mean value for each region or country,except medians are shown for Latin American earnings in Dec 2012 and Mar 2013.

Earnings


-5%

0%

5%

10%

15%


Africa


Wages & Salaries



-5%

0%

5%

10%


Africa

Notes: Presented data are the mean value for each region or country,except medians shown for Latin America in Dec 2012 and Mar 2013.

#FT=Number of Fulltime Employees


# FT Employees



-5%

0%

5%

10%

Latin America United States Europe AsiaAfrica


Notes: Presented data are the mean value for each region or country,except medians shown for Latin America in Dec 2012 and Mar 2013.

#FT=Number of Fulltime Employees

African Business Outlook Duke University / SAICA / CFO Magazine Jun 2013

Business Optimism Index(Scale from 0 to 100)

Country / Region

11


45

55

65

75


Africa

Notes: Presented data are the mean value for each region or country


Business Optimism Index (Scale from 0 to 100)

Own Company

12


45

55

65

75


Africa

Notes: Presented data are the mean value for each region or country


Intention to Deploy Cash Reserves

13

US Europe Latin America Asia Africa0%

20%

40%

60%

80%

100%

Yes No

Is it likely that your firm will begin to deploy its cash reserves during the next 12 months?

If not deploying cash, why not?

Latin American Business Outlook Duke University / FGV / CFO Magazine Jun 2013 14

Need cash

as liquidity

buffer

Currently

have few attracti

ve investm

ent opportu

nities

Lack

excess

cash

to deploy

Holding cash

to sa

ve for p

otential future lia

bilities

Do not need ca

sh re

serves as a

source

of funds

0%

10%

20%

30%

40%

50%

If deploying, on what will accumulated cash reserves be deployed?


Increase hiring

Marketing and advertising

Cover operating losses

Increase employee benefits/pay

Pay down debt/line of credit

Dividends or share repurchases

Acquisitions

Capital spending or investment

0% 10% 20% 30% 40% 50% 60% 70% 80%


Corruption as a Risk Factor to Business Development

16


10%

20%

30%

40%

50%

60%

70%

80%

90%

Not significant Moderate significant Very significant

The magnitude of business corruption (fraud, bribery, other ethical violations) as a risk factor, comparison across continents.

Effects of Business Corruption


Increases p

rice

Reduces t

ax revenues

Reduces q

uality

Hinders exp

ansion

Limits

competition

Hurts co

mpany reputation

Hurts employee m

orale0%

10%

20%

30%

40%

50%

60%

70%

80%


CSR and Sustainability as Important Objectives

18


20%

40%

60%

80%

100%

CSR and Sustainability is Important

The proportion of CFOs that state Corporate Social Responsibility (CSR) and Sustainability as important objectives.


Scrutiny of Executive Pay

19


20%

40%

60%

80%

100%

Yes No

Has the level of executive pay at your firm recently come under scrutiny?

Professional Tasks Reported by African CFOs% of CFOs that list as a “Top 5” task


1. Accounting and Financial Reporting 84.1%

2. Cost Control 58.0%

3. Cash/Liquidity Management 56.5%

4. Managing Efficiencies 43.5%

5. Risk Management 42.0%

6. Regulatory Compliance 40.6%

7. Managing Corporate Performance 34.8%

8. Strategic Formulation and Planning 31.9%

9. Strategic Execution 27.5%

10. Capital Structure and Financing Decisions 27.5%

11. Investment and Acquisition Decisions 11.6%

12. Investor Relations 7.2%

african business outlook part of the global business outlook

Documents

african business outlookpart

mean value

business optimism indexscale

data security12

country region11notes

internal concerns

list of concerns

global financial instability4