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CFOs point way to economic growth

Seek renewed efforts to tackle infrastructure deficit, forex volatility, others

Chief Financial Officers (CFOs) in Nigeria have identified weak infrastructure, foreign exchange (forex) volatility and unfriendly business environment as the major factors impeding the nation’s economic growth.

They urged government to adopt a sustainable measures that would help tackle the problems in medium to long term basis. KPMG Professional Services in its survey on CFOs experiences in areas of cost, enabling environment and business outlook for 2017, explained that the response showed that CFOs were less confident about 2017 growth prospects for businesses, organisations and general economy.

According to them, if government fails to give priorities to these key areas, it would significantly erode topline (revenue) growth of businesses and reduce their profitability in 2017.


The Partner and Head, Management Consulting, KPMG in Nigeria, Segun Sowande, said the CFOs admitted that 2017 economic environment would be a difficult one due to various macro economic concerns facing operators.

It however, noted that businesses would show some reasonable level of rebound in the next two to three years down the line. “We conducted the survey towards the end of 2015 and all the responses were deeply based on conditions that existed at that time. We asked them how confidence they were in terms of prospects for growth in 2017 compared to 2016. It was clear from the response that CFOs are less confidence about the prospects of economic growth in 2017 for business, organisation and general economy than they were in 2016.

“But when asked beyond 2017, looking at two three years down the line, the responses were different. We noticed there were much optimism about prospects for their businesses and economy within the next two to three years.

“It is clear to us that while CFOs believe that 2017 is going to be a difficult year, they are nonetheless optimistic that beyond 2017, as we proceed to 2018 and 2019, things will pick up. But they noted that they are not seeing us reaching our full potential as a country or for their industry within the time frame.”

The Partner, Tax, Regulatory and People Services, KPMG, Tola Adeyemi, explained that the CFOs acknowledged that forex scarcity and high interest rate is the greatest hurdle to growth and profitability.

“The cost issues they are having and risk manage strategies to address them is important. They said exchange rate presents the greatest hurdle to their growth and profitability, while high interest rate poses a negative impact on their business operations. They are not able to transfer the cost of interest rate to consumers, while they have not been able to source for alternative means outside the high interest rate environment.

“It is difficult to grow top line and enhance profitability because you are having costs that you are not able to pass on to consumers and the volume of sales of goods and services has declined because the economic environment has affected consumers spending.

“The deduction in topline with burgeoning cost, results in very reduced profitability and that is why they do not think there will be much improvement in 2017,” she added.

Another Partner of the firm, Ajibola Olomola explained that the outcome of the CFOs survey showed that government needed to intensify efforts on their various strategies to improve the ease of doing business in Nigeria.

“The CFOs noted that consistent power availability would be a major catalysts to growth in Nigeria. Others are availability of credit, improved focus on exchange rate policy and more support on infrastructure. Forex stability would boost the ease of doing business in Nigeria and boost the revenue base.”




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