194: Sandiso Gcwabe

Passionate about the public sector

Welcome to the CFO Club Africa podcast, where we interview leading CFOs from Africa and beyond. CFO Club Africa is a division of the Chartered Institute of Business Accountants, the professional body for business accountants, financial managers and chief financial officers. Go to www.cfoclub.co.za and join our community of accounting and finance executives.

Welcome to this CFO Club Africa podcast, in this podcast series I speak to leading financial professionals and CFOs about their professional journeys, their perspectives on the industry and their perceptions regarding the skills modern financial professionals must have to lead a successful organisation.

My guest today is Sandiso Gcwabe, he’s the Chief Financial Officer of the Western Cape Liquor Authority and he’s also the Deputy Chairperson of the SAICA Southern Region Public Sector Committee. Before joining the Western Cape Liquor Authority, he was the Financial Manager of the Saldanha Bay Municipality and an Assistant Audit Manager at the Auditor-General of South Africa. Sandiso, before we talk about your career, I see that you attended the CFO Alliance Summit in Capri with SAIBA, that must have been a really interesting event, what did you think of the conference and what are your key takeaways from it?

Thanks for having me and it’s an honour for me to be part of this podcast. The trip to Italy was quite an exciting experience for me, it was an amazing journey to be in the company of leading CFOs in the country for ten days for the tour and then the three days we spent at the conference.

It was an eye-opener for me to see what other CFOs outside the public sector are dealing with and the issues that they are managing, but also engaging with CFOs and leading finance directors from across the world to see how they are navigating the ambiguity that I myself have to manage in the context of the public sector and the Western Cape. But over and above that, exploring Italy, learning about its history and how things are done there, their perception of culture and how they have preserved their culture over centuries. It was an exciting experience for me.

There was a big South African delegation in Capri, and I must agree, the networking would have been very welcomed and very enthusiastic because there were so few opportunities in the recent past to network.

Certainly, especially in the public sector we tend to think that we’re isolated and the issues that we’re grappling with in the public sector are unique to us. But when we start having platforms to engage with like-minded leading CFOs and professionals, you start realising that the ambiguity that you deal with someone else is dealing with elsewhere in a different context. So being able to network at that level of CFOs, we had CFOs from Schedule 2 public entities and also CFOs from listed companies, so it was quite a diverse group of CFOs, and it was interesting to spend time in their company. I do believe that when we meet people, we meet them for a purpose and there’s a reason why we got to meet and connect in that manner.

Going forward, we are looking forward to leveraging those relationships for hopefully the betterment of the county and ourselves.

Tell us a bit about yourself, where did you grow up and why did you decide to become an accountant?

I grew up in a township in a small town called Willowvale in the Eastern Cape. I think my love for numbers started in junior primary school, we did typing and we also did some accounting. I think I just fell in love with the subject matter, and I think that came from my teacher. When I went to high school, I naturally chose accounting as a subject. Thuthuka did a workshop when I was in grade eleven and that’s when I decided I wanted to be an accountant. From then onwards it was an ideal that I pursued until I qualified in 2018. I then moved on from high school to joining the University of Cape Town in 2005 to do my undergrad and then the journey from there continued.

I then did my articles with the Auditor-General, I had a few options at the time but the Auditor-General one made sense to me at the time. So I joined the Auditor-General for articles in 2010 and I just fell in love with the reason why we are doing what we’re doing. Sometimes you have a goal of becoming a chartered accountant and I didn’t quite map out where I would do my training but when I got into the Auditor-General, the reason why the institution existed and the reason why it connected with me so much was because I got to do more work at the Auditor-General than just from a contract point of view. I ended up participating at a level higher than what my role at the Auditor-General required because I just had that much more passion for what I was doing.

You first joined the municipality in Saldanha Bay, which if memory serves me right, is a very well-run municipality in the Western Cape. Did your experience with the Auditor-General assist you to actually get the financials of that municipality in shape?

One of the reasons I joined that municipality was because I had audited them previously and the municipal manager, the CFO, at the time said we see the recommendations that you make, when we try to explain the context upon which we are experiencing challenges, you’re always insisting that the right thing must be done. Then they said, now we want you on this side so that you can come and implement all the recommendations that you made and try to see how well you would fair in the context that we’re trying to present to you, which we are disregarding. For me, it was a challenge to make that transition to say from an audit perspective you make these recommendations but there’s a certain context that [you] might not understand. Once you make that transition to the other side, then you are able to understand that context better and able to find a way to navigate it.

I’m proud to say that even after I joined the Saldanha Bay Municipality we continued the track record of clean audits and a track record of good governance, despite the context within which the public sector finds itself.

What do you think are the key challenges facing CFOs within the public sector?

I think the key challenge for me is being able to attract the right skills. I think public services across the world now are grappling with professionalisation and that was also affirmed at the CFO Alliance. We had speakers from the public sector environment, saying how do we professionalise public service because once you have a professional environment you are able to extract more value and create more value for the citizens. So I think that’s one of the key issues, how do we make the public sector attractive enough for skills and professionals to come and change the trajectory of the country.

Then you moved to the Western Cape Liquor Authority, tell us about this authority, how big is it and what are your functions within this Authority?

The Authority is a relatively small entity, it regulates the retail and micro-manufacturing of liquor in the Western Cape. Anyone who wants to sell liquor for retail purposes must acquire a licence from us and we then form a lifelong relationship with them, whereby we do routine annual visits to confirm that their licence is being operated in a manner that complies with our Act and any applicable laws, together with the conditions that we would have put in place to protect public interest.

So my responsibility there is to lead the whole finance function, which involves strategic leadership, financial management, supply chain and risk management. As a CFO you are required to have an integrated mindset, that even those areas that are not formally delegated to you, you need to make sure that you understand their impact on value creation and make sure that you have a positive impact on those as well.

The role of the CFO has changed significantly over the years and it’s a common theme every week on this podcast, that is that the CFO is not only responsible for the accounting functions of a business, and in your case this public entity. Are you involved with the strategic thinking and planning of the Authority and are you working closely with the executive leadership?

I believe that the role of the CFO is to support the development and the implementation of the strategy of the organisation, and in the public sector context by ensuring that it’s resourced in a sustainable manner.

So that’s the key role of the Liquor Authority in that when you consider budget allocations, you are making sure that allocation efficiencies are achieved and that the budget is only allocated to those things that support strategies. Also, ensuring that the total value chain that the entity is involved with is continuously reviewed and repositioned to make sure that the best value is always extracted from any investment that is made in that space to make sure that you always maximise the citizen experience for every rand that is invested by the entity.

So it requires you to not be a traditional CFO, but always look at the value proposition of the entire ecosystem that the entity has created that everywhere that it interfaces with the public or with stakeholders that value is maximised and inefficiencies are minimised.

CFO Club Africa is affiliated with associations of finance executives in France, Germany, Italy, Spain, Portugal, Greece, Mexico, Morocco, Tunisia and Namibia, and annually hosts an international CFO summit. You have done the work and achieved the CFO title, now join the CFO Club Africa as a finance executive.

Ryk van Niekerk is an award-winning financial journalist with over 20 years' experience. He is Moneyweb’s editor and hosts the Market Commentator podcast and RSG Geldsake, covering the markets, and financial and investment content, joined by CEOs, entrepreneurs, policymakers and others.

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