The KPMG Chief Financial Officers (CFO) Forum is a platform for discussing issues of common interest to CFOs as well as an avenue for CFOs to interact as a group with relevant government regulators and policy makers. The Annual CFO Outlook Survey continues to provide valuable insight into how CFOs and their organisations view the business environment.
The Nigerian economy came out of recession with a growth of 0.55% at the end of the second quarter (Q2) of 2017 and ended 2017 with an annual growth of 0.83%. The modest recovery in the economy can be linked to relatively higher oil prices, stability in domestic oil production and improvement in foreign exchange markets resulting in increased foreign capital inflows and reduced volatility of exchange rates. We sought the views of CFOs on the outlook for their businesses in 2018, current strategies for cost and risk management and what they believe the Government should prioritize to create an enabling environment. In comparison to 2017, CFOs are more confident about the general business outlook for 2018. The optimism expressed by CFOs is partly attributable to the emergence of the country from recession and improving macroeconomic indicators. Despite the optimistic outlook for 2018, our study shows that CFOs still have some critical ‘stay awake’ issues including:
• Tax, regulatory and government policy
• Margin enhancement, growth & cost optimization
• Foreign exchange and macroeconomic issues
While there has been a change between last year and this year in the relative impact of each ‘stay awake’ issue, it is instructive that the issues themselves have not changed, suggesting that while these issues are being partly addressed, they are yet to be fully resolved. In the meantime, Government’s increased focus on taxation has not gone unnoticed. There is general agreement that appropriate taxes must be paid. However, CFOs are apprehensive about tax multiplicity and administration. No doubt this is an area that requires careful thought to avoid counter-productive outcomes.
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