CFOs and Heads of Finance in leading organisations across all major sectors in Nigeria shared their opinions on the outlook for their businesses, their strategies for cost and risk management and the priorities for an enabling environment.
In the 2021 CFO Outlook Survey, KPMG collated the views of CFOs on the impact of the COVID-19 pandemic on their respective industries, their outlook on the prospects of growth for both the economy and their organisations, their key challenges from an ease of doing business perspective, and finally, their response to the challenges of improving the efficiency and effectiveness of the finance function.
In addition to this, KPMG incorporated feedback from organised interviews with selected CFOs across the key sectors of the economy. Below are highlights from the survey.
Prospects for Nigeria’s Economic Growth in 2021
The survey noted that CFOs have a pessimistic view on the prospects for growth in 2021, and this is consistent with their views about the growth of the Nigerian economy in 2020. According to the survey, some of the underlying reasons adduced for the much less confident view were:
- Uncertain FX Environment
- Oil price and Oil production
- Emerging Digital Economy
Furthermore, while Nigeria recorded venture capital investments of US$307m in 2020, and over US$200m already in 2021, the survey noted that policy actions like the recent Twitter ban in June 2021 bodes negatively for the outlook in the second half of 2021.
Ease of Doing Business in Nigeria
According to the survey, CFOs have identified Security, Infrastructure and Power as the top 3 matters that the government needs to address to enable ease of doing business, stimulate economic growth and enhance public trust.
In addition, CFOs also indicated that the Government needs to ensure policy harmonization and consistency in implementation to boost public trust.
The survey also noted that restoring optimism over Nigeria’s economic prospects requires increased efforts from both fiscal and monetary perspectives. It added that this would restore growth to either the mid-to-high single-digit levels observed in the era between 2000 and 2010, or double-digit expansion.
Leveraging Technology in Finance
The survey showed that CFOs identified Cloud Computing, Advanced Analytics, and Visualization as the leading technologies that have been used to improve efficiency in their finance functions.
They also identified other technologies, including Robotics Process Automation, Artificial Intelligence and Blockchain, as new frontiers for delivering financial services, and some CFOs have started exploring these technologies for adoption.
African Continental Free Trade Area (AfCFTA)
With the official commencement of AfCFTA in 2021, 50% of CFOs believe that the agreement between African nations will have a medium impact on their businesses in the short term.
Noteworthily, 40% of CFOs believe AfCFTA will have a low impact on their business in 2021. Nonetheless, they mention that having an effective execution plan for the AfCFTA will be important.
