By FREDRICK OBURA

A harsh economy is increasingly forcing local firms to shelve growth plans, notes a new survey of chief financial officers (CFOs) in east Africa.

According to the report, dubbed Playing to win in turbulent times?, firms are instead redirecting their resources to meeting daily needs.

The report by audit firm Deloitte  says CFOs are increasingly worried about rising costs of doing business occasioned by high inflation and interest rates, changing and unclear regulatory regime, reduced margins, unstable local currency and high fuel prices.

The report shows that businesses have refrained from passing on accruing costs to their customers and in turn eroding their margins.

Balancing ACT

“Any business requires that CFOs navigate between spending for growth and saving to pay bills, along with stretching payments to suppliers,” said Anne Muraya, Delloite partner-audit.

“This is a challenging task in the present circumstances where cost levels are soaring through the roof,”  Muraya said.

“The current high interest rates regime especially eats into the working capital — thereby hampering business growth.”

According to the survey, 44 per cent of the CFOs are expecting the future interest rates to oscillate between 15 and 20 per cent. Another 42 per cent say the rates will range between 10 and 15 per cent.

The general consensus among the CFOs is that the current interest rates are very high and crippling to businesses. The CFOs cited increasing administrative work, pressure from poor company performance and internal power struggles as among the headaches they deal with on day-to-day basis.

Fifty-four of the CFOs feel that administrative responsibilities have increased without a corresponding support staff.

“It is evident that CFOs are spending an increasing amount of time on mundane and routine administrative tasks,” the report says.

According to the report, lack of suitably qualified staff is another major issue troubling CFOs.

A whole lot of the CFOs are worried that the coming elections will further hurt regional economies.

They, however, expressed cautious optimism on the business environment this year and beyond — with 44 per cent expecting a better environment.

Another 63 per cent of the CFOs feel that there will be somewhat better performance. Forty-three per cent of the respondents felt that there is an above normal level of uncertainty, while 34 per cent felt that there is high level of uncertainty.