Andrew Harding | Chief Executive | FCMA | CGMA | Management Accounting | AICPA & CIMA | mail me |

Governance is crucial to economic development across Africa. With enhanced accountability and transparency, the continent can achieve substantial improvements in both the public and private sectors.

At the heart of this is the finance and accounting profession’s role and advocacy in shaping policies. These policies not only drive economic success but also promote best practices. Importantly, they foster trust in Africa’s institutions.

Good governance – cultivating trust and transparency

Professor Mervyn King has been an influential figure in modern corporate governance in Africa and abroad. The King Report established best practices in Africa and influenced policies of other governments and regulators worldwide. Integrated Reporting originated in South Africa. However, it is now widely adopted across the globe.

Strong governance places a focus on robust decision-making with appropriate checks and balances and encourages fiscal transparency. In contrast, poor governance offers incentives and opportunities for corruption, which undermines trust. Poor governance threatens market integrity, competition, and long-term economic development.

I believe that for Africa to take advantage of the opportunities and attract foreign investment, governments, and business leaders must place heavy emphasis on instilling good governance practices into both the corporate boardrooms and the public sector.  It is this focus on governance that promotes integrated thinking, forcing us to consider how strategic execution is enabled by an organisation’s structure, functions and decision-making processes, and its risk and opportunity management processes. It forces the finance and accounting profession and institutions to focus on accountability, transparency, and value, rather than just numbers and profitability.

Policymaker collaboration to improve business

Transparency and accountability are foundational to good governance, but more importantly, they are also the DNA of corporate reporting, and this is where the finance and accounting professionals are integral. They play a pivotal role in the sourcing, analysis, communication, and use of decision-relevant financial and non-financial information to preserve value for their organisation and build trust.

Moreover, Africa’s influence on the global stage is growing. As finance and accounting professionals, it is our job to share our organisations’ stories with markets, investors, and society, and to foster better collaboration between big business and policymakers to enhance business environments and unlock capital flows.

So, the key question is: how do we ensure more effective collaboration between finance, business and policy makers?

The solution lies in how we advocate for accountability and transparency through:

• Proactive engagement

Business can work in partnership with government to help shape and better inform policies and priorities. This is a relationship that needs to work on trust and government needs to be willing to engage and listen. Governments need access to business insights and data, and there is a hunger for information and feedback.

• Influence reforms

The finance and accounting profession can advocate for the policies that support economic growth across Africa, that help address some of the challenges facing governments relating to education and development such as skills gaps, productivity, and tax.

• Adopt and reflect best practice

Business must set the tone. To be advocates for strong governance, we need to adopt best practices across Africa. Finance and accounting professionals, including business leaders, have the potential to be important advocates for reform.

I firmly believe there are significant opportunities for the profession, businesses, and government to collaborate and ensure accountability in Africa. Ultimately, this collaboration can pave the way for economic growth and investment. As a profession, we have valuable lessons to share with our governments through our advocacy and outreach programs.

Related FAQs: Governance as a gateway

Q: What is the importance of accountability relating to governance as a gateway in Africa

A: Accountability is crucial in governance in Africa as it ensures that public servants are answerable for their actions and decisions, thereby promoting transparency and trust within the public service. It helps to uphold the rule of law and ensures that public resources are used effectively in the public interest.

Q: How can civil society contribute to accountability in the governance sector?

A: Civil society can play a significant role by engaging in research and advocacy, monitoring public expenditure, and holding public officials accountable. They can also participate in dialogue with the legislature to promote good governance across the continent.

Q: What are some challenges to good governance as a gateway in African countries?

A: Challenges include corruption, lack of transparency in financial statements, inadequate enforcement of the code of conduct and weak institutional frameworks. Many African countries also face issues related to political instability and limited public participation in governance.

Q: What role do financial statements play in promoting accountability?

A: Financial statements are essential for promoting accountability as they provide a transparent view of public finance management. They enable stakeholders to assess the impact of expenditures and ensure that public resources are utilised in alignment with governance frameworks.

Q: How does the concept of good governance in Africa align with global standards?

A: Good governance in Africa aligns with global standards by emphasising principles such as transparency, accountability, rule of law and inclusive participation. These principles help to create a conducive environment for democracy and sustainable development across African countries.

Q: What impact does poor governance as a gateway to accountability have on public resources in Africa?

A: Poor governance can lead to mismanagement and wastage of public resources, undermining public trust and hindering economic development. It can also exacerbate issues related to poverty and inequality, making it essential to advocate for accountability in governance across the continent.

Q: How can procurement processes be improved to enhance accountability?

A: Procurement processes can be improved by implementing transparent bidding procedures, regular audits and establishing clear guidelines that adhere to the code of conduct. This helps to minimise corruption and ensures that public resources are used efficiently.