The African Continental Free Trade Area (AfCFTA) creates an unprecedented environment for the profession to become ambassadors of change, partner with the public and private sectors, and get the commitment of governments to fully achieve the social and economic ambitions set out in the agreement.
This was one of the conclusions that emerged from the third ACCA Africa Members Convention, held virtually late last year (see boxout).
Out of 55 African Union (AU) states, 54 have signed up to the AfCFTA, in which tariffs on intra-African trade will be removed and borders within will become open to people, services and goods.
‘Reducing regulations inhibiting economic growth must include liberalising access to legal and accounting services’
The AU reports that, with average tariffs of 6.1%, African businesses currently face higher costs when they export within Africa than when they export outside of it. Eliminating import duties would therefore make it easier for businesses to trade within the continent, supporting economic growth nationally and regionally.
Foundation for growth
Oby Ezekwesili, former vice president of the World Bank’s Africa Region and co-founder of Transparency International, pointed out that the work of accountants is the foundation of economic growth.
‘Accountants provide the accurate financial information necessary to drive investment decisions and they support economic planning, while upholding vital public accountability that creates an atmosphere of trust and confidence on the global market stage,’ she said.
‘Creativity and emotional intelligence are core capabilities – we must become business partners, provide advisory, and support strategy’
With negotiations still under way to finalise the AfCFTA agreement, Ezekwesili called on the profession to seize the opportunity to ‘build strong partnerships with the public sector, particularly in struggling economies, not only to engineer economic growth but also to uphold the social contract that exists between governments and their citizens, and help deliver improved wellbeing for all societies’.
Vital services
According to the AU, more than half of Africa’s US$2.5 trillion GDP derives from trade in services, including accountancy. So, with a global network of professionals trained to similar rules and principles, the profession is uniquely positioned to drive the adoption of standards that are ‘comparable, verifiable, timely and understandable’, effectively establishing a unified market.
Through the services they offer to SMEs, practitioners also play a key part in helping businesses transform and thrive. As financial statements support informed decision-making, Beatrice Chaytor, senior expert in trade in services in the Department of Trade and Industry at the African Union Commission, suggested that professionals ‘collaborate with bankers, insurers and lawyers to establish special economic zones, one-stop-shops for services where those come together and ensure there is one place to help cross-border trade’.
Mesganu Arga Moach, Ethiopian State Minister of Trade and Industry and a key adviser in the AfCFTA agreement negotiations, supported this thought. ‘The opportunity to reduce excessive regulations inhibiting economic growth must include liberalising access to legal and accounting services to stimulate trade, stabilisation and crossborder investment,’ he said.
Is the profession ready?
There is some way to go. In an audience poll on readiness to contribute to the implementation of AfCFTA, the vast majority (64%) said accountants across Africa were not prepared or only somewhat prepared to help deliver the treaty’s promises.
In a following panel discussion, Philemon Kipkemoi FCCA, FD for East African markets at BAT in Kenya, commented: ‘Professional accountants will only be able to effectively support the application of the agreement if they invest time to understand it, to clearly articulate its value to member states and to keep the dialogue going even after core principles are agreed.’
As the profession evolves through the use of technologies such as artificial intelligence, panellist Robert Belle FCCA, managing director at Smip Consultancy in Kenya, pointed to opportunities around new types of work and new forms of businesses. Belle said that accountants should move from a compliance-based mindset to idea generation and strategic thinking. For this, ‘creativity and emotional intelligence are core capabilities – we must become business partners, provide advisory, and support strategy’.
For Alta Prinsloo, CEO of the Pan African Federation of Accountants, the current environment is an opportunity to learn and ‘move at speed from doing things differently to doing different things’.
Championing change
While governments are still fine-tuning internal laws and protocols, a lot of political commitment will be required to get to a completely unified pan-African market. However, as Den Surfraz FCCA, ACCA Council member and head of compliance at Butterfield, said, it is certainly ‘a step in the right direction and an amazing opportunity to come together to deliver peace, equality and prosperity’.
Key themes at the AMC
At the biannual ACCA African Members Convention (AMC), attendees explored:
- The critical role of accountants in Africa’s route to recovery and ESG adoption
- How a digitalised profession can contribute to sustainable transformation of businesses and economies
- The profession at the centre of policy development and economic planning as the continent pursues AfCFTA and the UN’s Sustainable Development Goals.
More information
Read how ACCA is bringing together expertise to contribute to debates on public policy through its Africa Advocacy programme in Thinktanks for the public good
