Chartered Accountant and Independent Advisor
Lerato Nkabinde provides a niche service to companies, advising on how to ensure not only lockdown survival but success.


CIARAN RYAN: This is the opportunity to plug the Certified Financial Officer of South Africa designation, which is offered by the South African Institute of Business Accountants. This is really the Formula One of accounting designations and is available only from the South African Institute of Business Accountants. The CFO designation is internationally recognised and validates the years of toil and ingenuity that it takes to reach the top of your field. You’ll be part of an exclusive and powerful network of CFOs and finance executives. As a CFO, which is a Certified Financial Officer of South Africa, you get to share in a wide range of benefits, you gain status as an international finance executive and achieve your listing in the official CFO directory. You’ll receive exclusive invitations to the CFO Talks events and get a chance to connect with knowledgeable thought leaders within the CFO community. For more information, go to


Today I am delighted to be joined by Lerato Nkabinde, a qualified chartered accountant, who has had an interesting career change in recent times, she is advising companies in the time of coronavirus about how they need to manage their affairs. Lerato has in-depth financial and operational experience in the financial services sector, she’s also very deeply involved in the construction sector. Welcome, Lerato.

LERATO NKABINDE: Thank you for having me, I am so delighted to be here.

CIARAN RYAN: You’re most welcome, these are indeed strange times and it does seem that this world has gone a little bit mad with this coronavirus. Now, this is obviously something very new and everybody is trying to figure out…they’re not making long-term plans, they are trying to work their way through to the end of the month and then how are we going to survive next month. I guess it’s a big subject, but this is something that you’ve taken on as a new career, so how do CFOs plan to survive through this coronavirus?

LERATO NKABINDE: Basically, what is happening right now is a crisis management plan is basically just a risk management plan. We’ve had some crises before, we had the SARS virus in the early 2000s and we had the financial crisis in 2008, so we should, in fact, be prepared for this, even though we didn’t expect that it would come so soon, six months ago no one would have expected this to happen. So what we should actually be doing is coming up with a crisis management plan, which is in effect a risk management plan, and what CFOs should be looking to is what is my current risk exposure and what can I be doing to reduce the risk, looking into four pillars of your business – financial risk, operational risk, strategic risk and reputational management risk. Then looking into other areas of business such as business operations, financial management operations, financial performance and communication with the market, that’s basically where the CFOs and the finance departments should be focusing now. We are so lucky that we are in the position where, as CFOs, we could be having conversations with business about how it is that we can move forward from there.

CIARAN RYAN: We talk about risk management plans, this is obviously something that doesn’t happen very often but risk management is really about trying to anticipate and plan for these things that nobody can really predict. There’s a book called The Black Swan, which was written by Nassim Taleb, which talks about these things, if the risk of exchange rate changes and interest rate changes, they are fairly predictable but something like this is not. Do you think that companies are going to have to completely overturn the way that they look at risk going forward and plan for the possibility of a very long disruption caused by the virus or perhaps even further pandemics further down the line?

LERATO NKABINDE: Let’s first understand what a crisis is, a crisis is anything that can disrupt your normal business activities, whether it be economical, whether it be political, whether it be a natural disaster like if you have a factory that’s burnt down. That is what can happen in a crisis. You have to have a long-term risk management plan just looking at what can possibly happen in my business, looking at the economy, looking at the political area that I function in and the normal business activities. Companies will definitely have to look at the long-term crisis management or risk management strategies because we are operating in an unpredictable world. This [current] crisis is giving us an opportunity to look at the way that we do business and it’s coming up with interesting ideas of what it is that we can do in the future, start looking at what are potential big risks. They did a study in America where PwC looked at what the potential big concerns are for the CFOs with regard to Covid-19 and the biggest concerns were the potential global recession, the decrease in consumer confidence and reduction in consumption and obviously the financial impact, including the impact on profitability, liquidity and capital resources, and this is something that CFOs should be looking at constantly and planning for the future.


‘A recession in South Africa is a big possibility’


CIARAN RYAN: One of the things that you said there was a concern for potential global recession, which almost certainly seems to be happening right in front of our eyes right now.

LERATO NKABINDE: Yes, some economists have predicted that South Africa’s economy in the next year can contract by 2% to 3%, so a recession in South Africa is a big possibility. We should be thinking about if we don’t recover from this crisis, like look at the potential, how long will it take for a business to recover in any crisis, will it take a month, three months, six months, and start planning for that.

CIARAN RYAN: Right, and, of course, a lot of companies are just wondering how they are going to make payroll at the end of this month. There have been some programmes which have been announced by the government to assist them but one wonders if this does drag on, let’s say, to the end of the second quarter of this year, we are going to see thousands of businesses going under, are we not?

LERATO NKABINDE: Yes but what we could possibly be doing right now is…for you to know where you are going you need to know first where you are, you need to be looking at what are the facts right now and the facts right now are that you start looking at your cash reserves, how much money do I have now and then start doing a cash forecast for the next 12 weeks biweekly and then looking at your financial obligations in a waterfall according to the importance of the stakeholders, the cash reserves tell a story, these are the cash reserves, I have to pay salaries, those are very important, I need to have interest obligations or investor obligations and then look at what your cash deficit is. Then start looking at the available credit lines, do you have any available credit lines, are there any contractors or suppliers that you can negotiate with to decrease the amount that you have to pay this year. Then as CFOs you have to take a decision as to who am I going to pay and who am I not going to pay, just so that I can make payroll.

CIARAN RYAN: That, of course, is the big question, is who gets on the list to get paid and who doesn’t. Now, obviously what President Ramaphosa announced recently is make sure that your employees are looked after. That would be the number one concern, am I correct?

LERATO NKABINDE: That’s the number one concern and as CFOs you have to make sure that staff is supported because if we are going to recover from this we are really going to need our employees to be able to help us and to be supported, and if they are affected in any way, especially with finance, they are not going to be able to do that. So the corporate culture comes into play at this time.

CIARAN RYAN: In your discussions with the companies that you are working with, I guess they don’t really know and nobody can predict what’s the outcome, but how are they planning, we are currently in a lockdown that will bring us out of that at the end of April. Some countries have gone through this and they have actually extended the lockdown because they weren’t satisfied that the virus spread had been contained sufficiently. If that happens in South Africa it becomes quite a serious economic downturn here. Instead of 2% or 3% contraction, we might perhaps see 5%, 6%, 7% or even 10%.

LERATO NKABINDE: The companies I am meeting with have actually developed what they call leadership team tasks [indistinct] initiatives and what it is that is happening in the country to make sure that they are adequately responding to that. As I said, having a 13-week forecast, which is the equivalent to a quarterly fiscal period is what is going to help with that because if any changes happen you can actually adjust your forecast and you’re also looking into the cash burning ratio, looking at how much cash is coming in and how much cash needs to be going out and how quickly are we burning this cash, and making sure that they are already asking their banks to extend their credit lines before those options are no longer available, and thinking about where they can store the cash in the moment. Also looking at any past trends as to how have we survived any dip in operations lately and looking at any expected losses due to this. From the beginning one of the companies that I am working for was already saying how much this virus has cost them, being clear about what their direct costs linked to this crisis is, so that in future they can have better insight.


Refraining from marketing in lockdown will be detrimental


CIARAN RYAN: It’s been reported in the press quite a lot that South African companies are cash flush and they have been for some years, and they have been criticised for that because they weren’t putting that money, supposedly, to the very best use. However, those companies that are sitting on big piles of cash will be able to come out of this, I guess, stronger than others who don’t have that cash. That really does bring me to another point, it’s a story that’s been circulating around, it’s about the Great Depression of 1929/30 and it was a period when Kellogg’s had really sprang to prominence, they had cash reserves, and one of the things that they did during the Great Depression was they started advertising more. Now, in a time of recession or contraction what companies tend to do is cut back on their marketing when the evidence seems to suggest that that’s the time you should be increasing it. Is that one of the things that you are advising companies to do?

LERATO NKABINDE: I am not advising companies to cut back on their marketing because one of the most important things to be doing in a crisis communication, it allows for people to not make any false conclusions and it also allows for your customers to keep informed. So marketing is one of the ways that we communicate to the consumer, we communicate to our stakeholders, we communicate to everybody who has an impact on our business. So cutting down marketing cuts down that form of communication, and that will allow for fake news to go around or for people to make uninformed decisions about the companies that we are operating. So marketing is not the place to cut down, you can cut down on rent and have virtual offices, but marketing and communicating to your stakeholders remains a critical skill to have during this crisis.

CIARAN RYAN: Just going back to this issue about cash and companies with cash will be doing better than others that don’t have cash at the moment, if you were to suggest a risk management plan going forward and the possibility that we might have another pandemic, it would make sense to me, and if I were a business owner I would certainly look at this seriously, is building up reserves just for this kind of contingency. Of course, insurance policies are available and that kind of thing that will help you cover your operational costs and your payroll costs. But is this something that companies should be integrating, is actual cash reserving for such contingencies going forward?

LERATO NKABINDE: Before you have a cash reserve I think you should do what I call an asset liquidation schedule, so looking at what are my assets, what do I have, what are my resources and how quickly can I turn those assets into cash, and if I can, what is the liquidation value. So, firstly, analysing your assets, do I have debtors, how quickly can I convert my debtors, do I have property, how quickly can I sell my property, what do I have, do I have bonds, do I have shares, do I have assets that I can quickly convert into cash. Once you can see that and what you are able to do and the amount of money that you can have in future, then you can decide whether or not you need to store cash or you can just carry on as normal. If you can see that it would be easy to convert, then I wouldn’t suggest that you store a large amount of cash because you could be losing the increase in value. But if you can see that your assets aren’t going to be able to generate cash quickly enough for you to recover in the case of a crisis, then I would say convert it now so that you can plan for the future.

CIARAN RYAN: Right, and when economic conditions turn around, of course, you can always acquire assets later.

LERATO NKABINDE: Yes, you can always acquire assets later but if your assets are quickly convertible, they’ve got a high liquidity value and they can be easily converted to cash, keep them and then when the need arises then convert them into cash.

CIARAN RYAN: Okay, now, what’s your take on this, do you think companies are a little bit stumped by what’s happened with this coronavirus? Do you think they are going to survive and bounce back towards the middle of the year, what does instinct tell you?

LERATO NKABINDE: When I was reading some of the surveys that were done, I wasn’t able to get my hands onto any surveys that were done in South Africa. But the ones that have been done in the US by PwC and CFO.University show that a small number of CFOs, like 6%, are worried about having a lack of a comprehensive plan to deal with this, which means that a lot of CFOs have been preparing for some or other crisis and also in conjunction with that a lot of them, about 90%, believed that their companies can recover within a period of one to three months. But take into account that most of these studies are done on Fortune 100 companies and not necessarily small businesses, which might take them longer. I do believe though that we have been, considering the fact that this is not the first time a crisis has happened, even though Covid-19 is a new thing, so I do believe that CFOs and companies with a proper risk management plan. I know when I was at Sifiso Learning Group we actually did plan for some business disruption and I did ensure that I evaluated our insurance for any adverse material conditions.


Can Covid-19 be considered as force majeure?


CIARAN RYAN: Right, that’s another thing, insurance policies often do include force majeure clauses and there’s been a lot of debate now whether this virus does constitute a force majeure event. But I imagine there is going to be a lot of dispute about that because the payouts are so massive and I think insurance companies are going to look at that under a microscope, are they not?

LERATO NKABINDE: There is going to be quite a lot of debate about it because I know when I was at Sifiso Learning Group and I was looking at our insurance policies and sitting with our brokers and doing it, we obviously didn’t specifically say any virus because we couldn’t anticipate that but we did take into account any material adverse conditions. So now the debate with the lawyers that everybody will have to look into exactly is what is an adverse material condition because this is beyond an act of nature, it’s something that is a disruption in business that has been made legal by the government, the president said everybody must go into lockdown. So unless you are providing an essential service, no one could have predicted this.

CIARAN RYAN: It’s very hard to argue that this is not a force majeure event, is it not?

LERATO NKABINDE: No, it is very hard, especially since it is legally binding, the company did not just decide to [stop operating]. So, for example, education, construction, we’re going to stop operating, we were told, we have to stop operating. Therefore, as a result a lot of companies aren’t going to mee their current obligations, not even financial. If you are in a construction company, you can’t build.

CIARAN RYAN: Okay, we’re running out of time here, I wanted to just switch gears from coronavirus for a minute, just give us a brief summary about yourself and your journey to where you are today, where did you go to school, where did you grow up and how did you end up here?

LERATO NKABINDE: I come from a small town in KwaZulu-Natal, Pietermaritzburg, I matriculated from a girls’ high school there and I didn’t know what I wanted to do with my career, I wasn’t sure if I wanted to be a lawyer, an actress or a CA. Then I got a bursary to go and study at the University of Cape Town, which is where I did my undergrad, and then from there moved to the University of Johannesburg to do my CTA postgrad, I had a bursary to study there. Then I moved to do my articles at PwC in the metals and mining department under the leadership of Sizwe Masondo and the rest of the CEOs at PwC. Then from there I joined YCAP, which is Absa Capital, stayed there briefly and then moved to Liquid Capital. There I was involved in many, many things from project management to working with WesBank and MFC as their financial analyst in our motor vehicle space. We produced MotorHappy, which is one of the biggest online motor vehicle products e-commerce systems in the country. From there after spending about three-and-a-half years there I went to Sifiso Learning Group, where I was the CFO for two years under the leadership of Sizwe Nxasana. It is a group of new age private schools, I don’t know if you have heard of them, Future Nation schools?


LERATO NKABINDE: Future Nation schools are twenty-first century learning, where we are learning using the project-based learning method, just to make sure that the future generation is equipped to deal with the business challenges in the country.

CIARAN RYAN: Got it, okay, interesting, so from KwaZulu-Natal to Cape Town to Johannesburg and you have had quite a varied career as a chartered accountant. Lerato, we are going to leave it there, thanks very much for that. I’d like to check in with you because this is obviously a subject that is just growing by the day and we’re going to need some guidance, and provide some guidance to business leaders and CFOs, so please come back and update us on what’s going on in your life. But thank you so much for coming on and talking to us.

LERATO NKABINDE: Thank you, I have also developed a CFO action plan, should anyone need it…

CIARAN RYAN: How can we get that?

LERATO NKABINDE: I’ll have to type it out properly and send it to you.

CIARAN RYAN: Oh, I see, an action plan, okay, we can provide your contact details at the end of this.


CIARAN RYAN: Thanks so much Lerato, have a good day.


This is the opportunity to plug the Certified Financial Officer of South Africa designation, which is offered by the South African Institute of Business Accountants. This is really the Formula One of accounting designations and is available only from the South African Institute of Business Accountants. The CFO designation is internationally recognised and validates the years of toil and ingenuity that it takes to reach the top of your field. You’ll be part of an exclusive and powerful network of CFOs and finance executives. As a CFO, which is a Certified Financial Officer of South Africa, you get to share in a wide range of benefits, you gain status as an international finance executive and achieve your listing in the official CFO directory. You’ll receive exclusive invitations to the CFO Talks events and get a chance to connect with knowledgeable thought leaders within the CFO community. For more information, go to

Ciaran is a seasoned journalist and podcast host. He has a back-ground in finance and mining, having pre-viously headed up a gold mining operation in Ghana.In this podcast he interviews various CFOs, get-ting more detail on the role of the CFO and their daily challenges and solutions.


CFO Club

Become part of a international community of finance executives.