Do CFO’s play a role in social economics?


In a recent Deloitte report, CFO’s operating in Romania are more optimistic about the future today, than they were a year ago. 92.6% of participants expect that the Romanian economy will continue to grow. A similar report, completed by Deloitte for CFO’s in South Africa paints a different picture.

In an essence the Romanian and South African economy structures show similarities in the challenges they face. Both Countries’ economies have suffered from years of economic sanctions and isolation due to political mismanagement and oppression. In order for CFO’s to truly understand challenges faced, would it be wise, when future planning, to understand and include the social economics of the country as well? South African CFO’s tend to tread with conservancy and sometimes act with scepticism towards future economic growth and planning. Many larger companies are focusing on off-shore investing opposed to local portfolios. Why? Is it simply financial savvy, or perhaps a result of a skewed understanding and the lack of wiliness to solve social economic challenges?

CFO’s in the European state are focusing on mechanics to boost local production and competitiveness within the union and abroad. Both countries have social economics influences that can be perceived negative towards economic growth. Yet Romanian CFO’s are tackling this data with a keen understanding of the negative, a possibly positive, effect social economics has on financial planning. The question remains; are South Africans CFO’s inherently negative? If both states face similar challenges, would the misinterpretation of social economics not skewer financial planning?

“CFO’s would need to factor in and solve social economic challenges in order to overcome negative perceptions”Karen Smal, Acting Head of ACCA South Africa

Case in point, a joint report recently released by ACCA and Longitude Research highlights the fact that financial institutes using “limited” financial information in order to support small businesses are seen as slow in decision–making, risk-averse and “ripe for disruptions”. Financial institutes in South African are seen as ‘risk-free’ lenders. If a keener understanding of social economics were factored in, would South Africa see a boom in small business activities through investments?

There is no doubt that South Africa faces challenges. However in the spirit of nation building the understanding and willingness to change the social economic landscape, would lead to an investment environment that would show optimism, evening in the darkest times. CFO’s would need to factor in and solve social economic challenges in order to overcome negative perceptions.

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