Thirty-two percent of chief financial officers in sub-Saharan Africa companies anticipate laying off staff in the next month, a sharp increase from the 18 percent recorded in the same survey a month earlier, as the economic realities of the Covid-19 pandemic begin to bite. Image: Maxim Shemetov Reuters
CAPE TOWN - Thirty-two percent of chief financial officers in sub-Saharan Africa companies anticipate laying off staff in the next month, a sharp increase from the 18 percent recorded in the same survey a month earlier, as the economic realities of the Covid-19 pandemic begin to bite.
This was according to the PwC Covid-19 CFO Pulse Survey for June, that was released yesterday.
A month ago, “many companies were still in the throes of crisis response and equipping their businesses to continue functioning.
“Today, as lockdowns are beginning to be eased, the economic reality of the pandemic and measures taken to contain it are starting to bite hard,” the survey said.
Many companies had weathered the immediate crisis — they had implemented safety measures, transitioned to remote work and other new ways of working, and are now thinking about what they need to survive and thrive moving forward.
And they were doing so at a time of heightened social tension in which leadership would be critically important.
“Even in a global sample with countries at different points of virus spread and government response, common themes emerge: concern about a new wave of infection and how to keep people safe, the need for agile plans to navigate a global economic downturn and re-engage customers, and the pursuit of new revenue streams through innovation,” PwC said.
Key findings included: 95 percent of chief financial officer’s ( CFOs ) expect a decrease in revenue, with more than a third of them expecting revenue to fall by more than 25 percent.
Fifty-nine percent of African CFOs said it would take more than six months for their business to get back to normal if the virus ended today, while 51 percent were concerned about the impact of the global downturn on their businesses.
Some 83 percent were confident in their company’s ability to provide a safe working environment. Eighty percent of African CFOs believed the current situation will make their companies better in the long run.
The top concern among African CFOs was the financial impact on their business, including effects on operations, future periods, liquidity and capital resources (59 percent).
This was followed by concern about the impact of a global economic downturn (51 percent), and worries about a new wave of infections (39 percent).
Whereas 58 percent of global respondents expressed concern about the potential impact of a new wave of Covid-19 infections, substantially fewer CFOs in Africa (39 percent) were worried about this right now.
This contrast probably reflected the fact that Africa was still in the initial phase of the pandemic, while regions that were affected earlier now faced secondary outbreaks.
“”Our findings reveal CFOs in Africa are significantly more concerned than their global peers about issues such as increased costs of doing business (Africa: 32 percent; global: 16 percent), supply chain disruptions (Africa: 29 percent; global: 17 percent) and cybersecurity risks (Africa: 27 percent; global: 16 percent).
This might be attributable to the challenging risk environment in which many businesses in Africa operated, PwC said.
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