In a strong vote of confidence in South Africa, the International Association of Financial Executives Institutes (IAFEI) on Wednesday announced it will host its 46th World Congress of CFOs in South Africa in November.
The global CFO body announcement comes despite growing political uncertainty ahead of local government elections in August and as South Africa awaits the credit ratings review from S&P Global Ratings on Friday.
The IAFEI represents more than 20 member countries and the world’s leading and respected CFOs.
Ratings agencies S&P and Fitch both rate South African debt one level above junk, with negative outlooks on its BBB- assessment.
A downgrade in an already ailing economy will signal a riskier investment climate and will have dire consequences for borrowing costs, foreign direct investment and employment.
With this move, the IAFEI has endorsed South Africa as a key player in global financial markets and the preferred investment gateway into Africa, said SA Institute for Business Accountants’ CE Nicolaas van Wyk.
“There seems to be a ‘mismatch’ with the rating agencies’ assessment of South Africa’s growth prospects, and the view of multinational company CFOs.
“It is evident that global finance leaders will not be deterred by whatever decision is reached by ratings agencies,” he said.
The world has undergone a period of natural selection, but it is now time to find a new path for growth and Africa can become the great continent of hope by unlocking its potential, said Van Wyk.
According to him, Africa attracted US$73,5bn (R1,1 trillion) in foreign direct investment in 2015. In the next 15 years, 370m youth will enter the job market. By 2050, Africa’s population will be 2bn people.
“As CFOs of the world’s largest companies we need to ensure that development takes place at the local level and in a fair manner. The world’s global economic system is teetering on the brink due to mass migration, population growth, growing unemployment and huge debt burdens,” said the IAFEI.
The CFO body believes the global CFO community can no longer just rely on politicians and governments to solve the world’s problems and they need to play a stronger role in mapping the path to recovery.
