All eyes on Africa
Over the last three years the Baker Tilly network has out-performed its rivals in Africa with a combined average annual growth rate topping 12.5%*
The main catalyst for this growth? Growing cohesion between members in the region and the shared commitment to challenge thinking and inspire conversation to shape the tomorrows of our clients, our profession and our communities, explains Murray Watt, the network’s Regional Director for Europe, Middle East and Africa.
Africa has long been a focus area for the Baker Tilly network: increasing both its footprint and strengthening capabilities to meet increased client demand. And while 2020 has not played out how any of us could have predicted, our member firms have recorded a strong start to the year with several strategic developments coming to fruition.
Broadening service capabilities
Increased interest from foreign multinational corporations looking to exploit the region’s vast opportunities has led to several advancements within the Baker Tilly network aimed at expanding client service offerings.
This latest phase in strategic expansion kicked off towards the end 2019 when RSM Durban merged into Baker Tilly, increasing the capabilities and service offering of one of Durban’s oldest accounting firms.
“This unity [Baker Tilly and RSM] brings innovative opportunities for our teams to expand their knowledge and ensures that they have the necessary skills required in today’s modern business world to cope with increasing regulatory requirements” – Susan Stanley, Managing Partner, Durban, South Africa
In February 2020, we welcomed Baker Tilly Majer: a US$2m, full-service accounting firm operating out of Casablanca and Tangier, Morocco.
“The firm’s skillset, and it’s particular strength in advisory services, complements the profiles of our existing members in Egypt, Middle East, Spain and Tunisia – all strategically important economic territories with close business ties to Morocco”, explains Watt.
As in other regions, many countries in Africa are seeing the market for traditional accounting services – such as preparation of financial statements and audit reviews – reaching saturation. Firms are being forced to explore new opportunities and develop new skills in tax planning, global compliance and international accounting standards implementation.
Baker Tilly Ivory Coast Director Noel Koffi Yao says demand for full service firms, with a focus on legal and tax services as well as accounting, is growing.
“Clients are expressing greater interest in areas outside of taxation. Here in the Ivory Coast we are seeing a spike in demand for social management services, which encompass payroll and human resources.”
And this is a trend echoed elsewhere in the region.
“New technology and shifting demographics are forcing all component parts of our clients’ HR functions to evolve”, says Phibion Gwatidzo, CEO of Baker Tilly Central Africa and Chair of the network’s African Co-ordination Committee.
“And those clients are increasingly reviewing their HR functions to align them with the changing dimensions of their workforce. And as advisors to those clients, we need to match our service offering to their needs.
“As a region, our focus is firmly on building that integrated client solution.”
In June 2020, Baker Tilly Central Africa, an integrated professional services firm operating out of Zimbabwe, Botswana, Zambia and Malawi, welcomed HR consulting firm LoriMak Africa to its local network. LoriMak Africa brings more than 25 years of expertise in human resource management services to the network, providing new capabilities to support clients.
The impact of digital advancements is being felt wider than just within HR functions. Just as we’ve seen elsewhere, it is fundamentally changing the way accounting and audit firms work in Africa. And COVID-19 has accelerated the pace of that change and the growth of digital services, explains Chakib Zaari, Managing Partner at Baker Tilly Majer.
“In Morocco, the State has taken major steps in this direction through its Digital Morocco Framework, with the implementation of e-services including online filing and payment of taxes.
“In recent years, each finance law has included measures to speed up the digitisation of tax administration. This has enabled the state, among other things, to achieve an unprecedented level of efficiency in terms of collecting, processing and using data submitted by companies.
“While this digital transformation is a guarantee of a better service to the taxpayer, it is also synonymous with a greater requirement for tax compliance.
“Over the course of this year, the state has introduced a number of amnesty procedures that aim to encourage non-compliant companies to regularise their situation as regards foreign exchange regulations. These new obligations are creating new market opportunities for accounting firms that deal with tax issues.”
In Zimbabwe, Baker Tilly Digital combines digital strategies, innovative thinking and technology to unlock the true potential of clients through cyber security, digital forensics and digital transformation.
“We provide the opportunity for clients to become more efficient, transparent and insightful so they can deliver a more meaningful relationship with their next generation of customers”, explains Gwatidzo.
But as well as opportunities, digital advancements bring challenges.
“The challenge of upskilling staff to take advantage of the emerging digital economy and technological disruption exists,” says Solomon Adeleke, Senior Partner at Baker Tilly Nigeria.
“For small firms here in Nigeria, for example, there are limited resources to invest in technology that may positively impact service delivery.
“For accountants, COVID-19 has brought opportunities to assist companies grappling with the effects of the pandemic, such as consultancy work around restructuring of borrowings and loans from financial institutions” – Madhav Bhandari, Managing Partner, Kenya “This is where the power of belonging to a global network can really be seen: having the resources to tackle these issues together, to effect change for our clients.”
A mixed picture
When it comes to COVID-19 and its impact, the picture is mixed across the African continent. Some countries are reporting very few cases, while numbers are climbing rapidly in others. The region’s more fragile economies are taking a heavy hit, with industries struggling with cash flow positions and levels of business output. Government measures designed to cushion businesses from the impact of the pandemic are being tested.
But what is clear is that our members are poised to address changing market drivers to serve their clients’ needs today, to protect their tomorrow.
Download our Gateway to Africa guide.
*Source: International Accounting Bulletin