SDG 9 and finance professionals
The United Nations sustainability goal number 9 talks about building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation. This goal talks a lot to countries like Zimbabwe and fellow African nations. The government, the rest of the public sector and indeed the private sector all have a role to play. I particularly like this goal because of what it will achieve in the long term, around reduction of unemployment and poverty. The United Nations Sustainability Goals (SDGs) are all interdependent and progress on one will have an effect on the other ones.
Finance and business professionals have a role to play in achieving this particular goal number 9 - Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation (https://sdgs.un.org/goals/goal9). In fact, I believe that accountants particularly those in senior positions may easily be one of the most important groups that can influence our ability to achieve this and other goals. This equally applies to similar initiatives such as the African Union’s Agenda 2063 or even Vision 2030. SDG 9 has targets and indicators which will help monitor progress. I will pick on some of them and elaborate on how the finance and business professionals can play a role.
Develop quality infrastructure
This target, in full is, “Develop quality, reliable, sustainable and resilient infrastructure, including regional and trans-border infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all”. The other metrics include percentage of rural populace within close reach of an all season road as well as volumes of passengers and freight by mode of transport. The rains of 2020 compounded the situation with our roads which we are now seeing efforts towards repair thereof.
The efficient interlinking of places will ease the ability to produce and move goods, be they raw materials or processed goods. All of this will cost money and accountants and finance professionals need to come in to play a role in raising the funds required for such infrastructure. Whilst the government has already taken a lead, the private sector is equally important as well. Investing in key infrastructure projects has to be a deliberate decision by key players in the private sector.
Inclusive industrialisation
The other target, which I have highly summarised as the sub-heading, among other factors, talks about a measure of manufacturing employment as a fraction of total employment as well as manufacturing value added. On this front, we again need to have investment into value addition. Business leaders and government alike need to work towards this objective. Our exports are often of raw materials and conversely we import a lot of finished products. We thus, in my view, have a lot of exports which is really great, but we also have a lot of imports which essentially offsets the exports.
The local manufacturing is nowhere near where it needs to be. Admittedly, some of our processes are not as efficient as they need to be. Our local industries struggle to compete with regional peers who in some instances benefit from economies of scale. The business leaders need to make a conscious decision to support local enterprises albeit at the expense, in some cases, of better margins.
I have no doubt this will be a tough sell to any board particularly to those members of a finance background who will easily notice how the numbers are skewed. I would propose that there also needs to be some form of vertical integration coupled with investment into more efficient and competitive manufacturing processes.
Access to financial services
Access to financial services is key for small and other businesses to thrive, including and especially access to affordable credit. The small entities often lack the requisite human capital and skills to have robust systems which give confidence to lenders, investors, creditors, suppliers etc. Organisations such as Professional Accountancy Organisations (PAOs) need to have support structures to assist the small scale entities. For example, in the recent past two weeks, Institute of Chartered Accountants of Zimbabwe (ICAZ), Institute of Directors Zimbabwe (IODZ) and a member of Zimbabwe Institute of Tax Accountant (Zita) teamed up to upskill potential start-ups on the basics of financial systems, controls, taxation and corporate governance.
Such skills will assist the small scale industries to spruce up their operations and thus better formalise in order to access financial services including affordable credit, and integrate these into value chains and markets. PAOs should continue to provide tailor made programs for smaller entities to help them grow.
More experienced finance professionals also have a role to play in equipping the smaller industries with key skills, knowledge and contacts so that they can transition into larger and more formal enterprises with access to key services.
Adoption of technologies
As has been mentioned numerous times, focus on ESG is important. At the risk of sounding like a broken record, I will highlight how critically important it is for boards, CEO, CFOs and other relevant leaders to focus on this area. Throughout 2021 we have been hearing about climate change and more recently COP26 got a lot of coverage and continues to.
Accountants and finance professionals need to continue to lead on this front, in particular when they occupy senior positions in industry and commerce. The benefits of sustainable processes are not just for the environment and the survival of future generations, but also include improved profitability in the long term. Any business that has ESG at the core of its strategy is better equipped to deal with crises. Fears around the immediate impact on profitability in the short term need to be managed and should not deter an entity from focussing on the big picture around long term sustainability for the operations and the world at large.
Adoption of integrated sustainability reporting is vital to ensure that not just numbers are reported on but other metrics to help readers understand the entity. This will help analyse the long term prospects of an organisation and foster a culture of addressing potential risks. Assurance of the non-financial information by audit firms is equally important. The overall effect will be improvement in the operations of the whole economy, particularly this article’s focus area of manufacturing and industry.
Enhance scientific research
In this target area, key indicators are a measure of research and development against GDP and the number of researchers per million inhabitants. The research and development costs need to be a component of any budget for relevant entities. This should progressively increase over time to encourage innovation. Again, the accountants need to drive this through allocation of the required financial resources. A culture of innovation also needs to be cultivated with motivation, support and reward.
The innovations will go a long way to address some of the previously mentioned inefficiencies that are plaguing some of our processes. A robust R and D policy monitored at board level is also crucial in ensuring that we have a boom in our industry through innovation relevant to our own circumstances.
Conclusion
In conclusion, an all hands on deck approach is required, led by allocation of resources to the important areas that will see an improvement in our industry, innovation and infrastructure. This will have a knock-on effect on other areas of the economy thus allowing us to meet set targets and improve the economy. Accountants, finance and business professionals are at the centre as they have a say in resource allocation.
Mavengere is the technical manager at the Institute of Chartered Accountants of Zimbabwe (Icaz), which is the largest and longest standing PAO in Zimbabwe. — technical@icaz.org.zw or twitter: @OwenMavengere.