Around 123,000 of Africa’s 1.3 billion population – 0.012% – are qualified accountants. Yet this tiny proportion has an outsized ability to influence the economic future of the continent.
High-quality corporate reporting, as a new report points out, is the key to improving transparency, facilitating the mobilisation of investment, creating a sound investment environment, and fostering investor confidence and, as a result, financial stability.
Titled State of the accountancy profession in Africa, the report is the product of an extensive collaborative study between ACCA, PwC and the Pan African Federation of Accountants (PAFA). It is designed to assess the current and emerging state of the profession in Africa and the opportunities for professional development.
More than 1,750 accountants took part in the research, which included a series of roundtable discussions and interviews with leaders of regional organisations and public sector institutions. The results will inform national and regional development planning, and support the sustainability and transformation of the profession in Africa.
High-quality corporate reporting is the key to creating a sound investment environment
Key calls to action
Professional accountancy organisations should:
- prioritise upskilling and reskilling members to close core skills gaps
- deepen the focus on professionalising public sector accountancy through targeted capacity-building initiatives
- push harder for the adoption and implementation of IFRS Standards in Africa
- review curriculums and exams to prepare professionals for the future.
Regulators and standard-setters should:
- facilitate development of French interpretations of IFRS Standards
- define clear roles between PAOs and regulators while enforcing impartial regulation
- be more proactive in driving the harmonisation of national and international standards
- work with professional bodies to review the minimum professional licensing requirements.
- drive efforts to enhance transparency, accountability and responsible governance in public sector institutions
- collaborate to agree and establish minimum indicators to measure professionalisation
- make training in good governance and ethics a mandatory requirement of continuing professional education for professionals in the public sector.
Areas of study
The study looked at four key issues:
- capacity building – what needs to change to make sure that tomorrow’s accountants are well equipped for the challenges ahead?
- the strategic alliances that will be needed to ensure that the profession is able to deliver on its promise to society
- influencing for socioeconomic development – Africa is poised for transformational development but beset by weak governance, so what does that mean for accountants?
- the future-ready professional – what skills do the accountants of tomorrow need?
Overall, more than half of those taking part were optimistic about Africa’s future economic prospects, mainly on the basis of high levels of investment in infrastructure, the telecoms and technology environment, and implementation of policies intended to encourage protection and sustainability of the environment.
For the profession in Africa, though, skills shortages – particularly those around technology, strategy development, internal control and climate reporting – remain a significant challenge (see graphic below).
The report says that finance professionals will also need to acquire or improve their skills in emerging areas such as ESG (environmental, social, governance) disclosure but adds that even in more traditional roles, the profession could benefit from some more well-targeted capacity building interventions.
Professional accountancy organisations (PAOs) are playing the key role in capacity building and will continue to do so, but survey participants felt that there were a number of areas where their work could be improved.
Roundtable participants, for example, called for professional bodies to rethink their approach to continuing professional education and develop a strategy that would achieve uniform skills development across the continent.
The public sector was also seen as in need of targeted support, as there is evidence that younger generations are becoming less committed to completing their professional qualification. The report argues that while the profession is contributing to the professionalisation of public sector institutions across Africa, capacity constraints, and ‘in some cases a weak political will’, are holding back rapid progress.
The report suggests that more focused strategic alliances between professional accountancy organisations and selected partners – such as other bodies and regulators – could help address the profession’s capacity needs. While partnership agreements between organisations are common in Africa, these are not always comprehensively implemented, with the result that professional bodies may not achieve their collaboration objectives.
Obstacles to progress
The profession’s role in building ethical and sustainable businesses is seen as an important opportunity in Africa, but the report argues that a limited understanding of ESG within the profession is holding back progress (see graph below). Around four in 10 respondents identified the ability to incorporate climate change and ESG into financial reporting as a major skills gap. The profession, says the report, ‘has not yet properly recognised ESG as a business imperative – or its implications for the role and skills of accountants’.
The report issues calls to action for various stakeholders (see box), which will help to ensure that the profession lives up to its transformational potential and continues to contribute significantly to the socioeconomic development of Africa.
ACCA chief executive Helen Brand described the report as a ‘unique’ view of the profession in Africa at a time of immense change. The results show that the profession is aware of the issues it needs to tackle, she added, as well as 'optimistic about the future, keen to do more and to create opportunities to prove its value across Africa’.