Chartered Accountant and Financial Consultant
This is how Tryphosa Ramano defines the modern CFO, as she shares highlights of her dynamic career with CFO Talks, touching on her time at National Treasury, SAA, WIPHOLD and most recently at PPC.


CFO(SA) designation

Here I want to give a quick shout-out for the Certified Financial Officer CFO (SA) designation from SA Institute of Business Accountants (Saiba).

This really is the Formula 1 of accounting designations and is available only from the SA Institute of Business Accountants. The CFO designation is internationally recognised and validates the years of toil and ingenuity it takes to reach to the top of your field. You’ll be part of an exclusive and powerful network of CFOs and finance executives.

As a CFO (SA) 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 will receive exclusive invitations to the CFO Talks events and get a chance to connect with knowledgeable thought leaders within the CFO community.

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CIARAN RYAN: This is CFO Talks and today we are talking to Tryphosa Ramano, who is a chartered accountant and financial consultant, who has spent many years in the corporate world, most recently as chief financial officer for cement producer, PPC, where she played a critical role in the company’s expansion into the African continent, specifically into Zimbabwe, Botswana, Congo, Ethiopia and Rwanda. Before that she was CFO at WIPHOLD and even before that she was CFO at SAA. She also spent a number of years as chief director for asset liability at National Treasury. First of all, Tryphosa, welcome to CFO Talks, how are you?

TRYPHOSA RAMANO: I’m good, thanks.

CIARAN RYAN: Great, you have transitioned quite recently from CFO at PPC to consulting, why did you do that?

TRYPHOSA RAMANO: I thought it was a new chapter in my life because I have been CFO for most of my career life and I thought it’s an opportunity to start my own outfit and consult in terms of the financial strategies and assist companies that really need my services but then I don’t have to be fulltime employed.

CIARAN RYAN: As CFO at PPC you were involved in some pretty major expansion into Africa, can you explain some of the challenges in accomplishing this because you were going into some markets in Congo in Central Africa, which are quite difficult for a cement producer to operate in, what are some of the challenges you had there?

TRYPHOSA RAMANO: The challenges from a CFO point of view were, firstly, it was funding, where one had to look for funding and that will not be too much on the balance sheet of the holding company, which is listed on the Johannesburg Stock Exchange, and at the same time that will not detract from doing the expansions. One of the challenges, for example, is on the funding side with the DRC, PPC has a partner, PPC owns 68% and the other percentage is owned by the partner in the Congo and also the IFC. But then when it comes to funding, the partner doesn’t have the money to actually contribute to what is required from the equity contribution, which is similar to what has happened in South Africa in terms of Black Economic Empowerment. So because of our experience in South Africa, as to how we structured some of the Black Economic Empowerment transactions, we had to use that skill to actually structure a transaction in the Congo, whereby it makes that funder to be able to participate but also contribute some sort of funding from a notional vendor funding point of view. It was not an easy because then what you had to learn is that in the laws of the Democratic Republic of Congo notional vendor funding is not recognised, they don’t even know what it is. So you have to find a way, in terms of the law, of incorporating it and the only way to do it was to put it in terms of the shareholders’ agreement, in terms of the agreement amongst the shareholders, in terms of how this funding is going to be done. So it’s still going to be tested, if there’s a dispute, as to whether in court you can actually enforce that but that’s how we managed to get through it. The other challenge is that from a finance point of view, different countries have got different laws, they have got different regimes. For example, in Ethiopia, the country itself was not using the International Financial Reporting Standards, so at that particular point in time they were using their tax systems as a way of recording the accounts but in order for the company to comply to IFRS we had to put it into the shareholders’…the agreement with the funders to actually look for generally accepted accounting principles. So you can imagine it’s difficult having accounts done that way, when you do the consolidation you have to migrate to IFRS. The same thing in the Democratic Republic of Congo, they use what is called OHADA, which is normally the accounting system that is used by the tax authorities amongst the French-speaking colonies on the continent. So as a result the accounting system that we developed, we developed a system that is IFRS and then you have a system that is OHADA, and you have something in between that talks to each other to convert. So you are prone to making errors and all of that with that but we managed to get through it and we managed to succeed. Also in some of these other countries from an IT point of view, the South African company at PPC, we use SAP as an ERP system but then you get into these other countries and you find that SAP is not actually supported or there are no available competencies within the country to actually support SAP. So you need to find another system that can talk with SAP and still have the financial information that is credible in the system. So it puts on a lot of pressure from an IT point of view. So most of the companies need to have an information technology strategy when they go outside of the country, to actually see what sort of support system is available in different countries and be able to make sure the systems can talk to each other.

CIARAN RYAN: I see that with you having moved into the consulting space from being chief financial officer, are you now working with companies around the continent or are you specifically focused in South Africa? What kinds of companies, are we talking about high level companies here and what specifically is your focus area as a consultant?

TRYPHOSA RAMANO: At the moment…I left PPC in October and then in October I took a sabbatical for six months to focus on myself because I have a granddaughter who’s in the USA, so the intention was to assist my daughter with her. However, then Covid-19 happened, and we ended up being in lockdown. So currently I am still only consulting with PPC at the moment because they gave me a contract for the next 20 months or two years with them, so I am still consulting with PPC. I am also engaging with some group, a company in Zambia, who are also looking to get funding in terms of their project in Zambia. But now it’s a little bit difficult to work at this stage because of Covid-19. But I have also collaborated with other consulting companies, who are also in the main consulting industry, whereby when they need my services in terms of assisting them with some of the big projects that they are working on.


From bean counting to strategic decisions


CIARAN RYAN: Just taking a look at the role of the CFO, which is a position that you’ve occupied for many years, how have you seen that role changing over the last decade or so?

TRYPHOSA RAMANO: The role has changed from mainly being a bean counter to a role that’s more of a strategic nature. I always say there is a difference between a financial director and a CFO. A financial director by law you need to make sure that you occupy that space, you take care of the financial issues of the organisation, make sure that the accounting is [correct], make sure that there’s integrity and completeness in the numbers that are being shared with the broader stakeholders. From a CFO point of view, there is that role now whereby you are…I say it’s a role more of a, at some stage, it’s an army general and a ballerina because as much as you are an army general you need to make sure that you’re tough, you need to make sure that when things don’t make financial sense you don’t go with it and at an exco level remember that you have got the CEO, you’ve got the divisional managing directors or divisional heads, you’ve got the marketing people, you’ve got human resources, all of them have got big plans in terms of meeting the strategy of the company and all of those plans need funding. As a CFO you end up being the bad cop, whereby all of the big plans that they can’t do because there is no money or the company cannot afford it. Depending on how mature organisations are, you get labelled all sorts of names and then you are an army general and you want to make sure things are correct because when things fall apart, the stakeholders, especially the shareholders, they don’t look at the CEO, they look at the CFO, where were you, especially now that we are looking at accounting scandals that are actually happening. Errors will happen, we are human beings, we make errors and as long as you can justify an error. But the problem is you don’t want to end up doing misstatements intentionally, purely because the company wants to achieve some of the things. Then the other passion is that you need to be like a risk manager from a compliance point of view, you have to make sure that the financial risks of the company are managed well. At the same time you need to have humility and humble yourself, you need to be able to work with people because you are working with people in different departments, you need to be easily accessible, you need to be more like a leader, you need to provide leadership in terms of your team, your team members who are working with you, so that they can deliver, you need to be able to be a team player with the exco. The CEO needs to rely on you, to know that if we go onto this strategy do you think that the balance sheet will actually accommodate it. If it’s okay, then the CEO can go ahead and talk about his strategic vision in terms of the organisation. So the role has migrated and we are seeing in most of the schools, universities and other academia that they are also trying to change, even the South African Institute of Chartered Accountants is also trying to change the manner in which they train their upcoming CAs to make sure that you are actually flexible. Remember that in any organisation, the next in line in terms of the CEO is the CFO because the board knows that these are the only people who they have engaged with all the time, the CEO and the CFO, in terms of the JSE-listed companies they are the ones who are actually recorded as executive directors, in the public sector there are also those who are recorded as executive directors, so they become board directors as well. But the challenge is that sometimes you find some of the CFOs grow up in the organisation from starting as an accountant and they grow in the ranks, then they become CFO but they have never been prepared to be a board member. Being a board member is a different aspect because you need to understand governance, compliance and then you end up trying to figure out in terms of what is important and what is not important.

CIARAN RYAN: It’s been said to me before that the CFO can often be the most unpopular person in the boardroom because he’s the person who is always saying no, everybody wants funding for their particular project and the CFO says no. You have just raised that point there. Now, I see that your period at SAA, you were chief financial officer there until 2005. That’s just an interesting case and, of course, your time there was well before the airline ran into serious trouble, now it’s in business rescue. We have heard recently that the creditors of SAA have agreed to the rescue plan, National Treasury has agreed to provide funding to save the airline. When you look at this and the recent events of the airline, what’s your feeling about this? When did it start running into trouble and how is it doing under business rescue in your opinion?

TRYPHOSA RAMANO: When I went to SAA at the end of 2003 is when it was beginning to run into trouble. I went to National Treasury because I wanted to get experience in terms of how government works, how do they make budgets, how do they make decisions because I was a portfolio manager at Rand Merchant Bank at the time. Then when I was working in Treasury, one of my portfolios was to review state-owned entities because they were coming to the government to ask for guarantees and all of that. The government was managing the fiscus and managing the government debt to make sure that there are no…guarantees because of the ratings agencies, and also for fiscal discipline and fiscal prudency. In that we introduced what was called a guarantee committee, the GCC, whereby most companies they can come and apply for guarantees, we assess, it’s like a credit committee and we charge for that guarantee. In that time, while we were doing that most of the SEOs stopped coming to the government for guarantees and they started raising funding on their own balance sheet because it was becoming expensive now because they are being charged. It reduced the government debt, contingent liability, quite significantly at the time. I am pleased to say that committee is still in existence now in the National Treasury from when we started it at that time. So we reduced a lot of contingencies. So while we were doing that in terms of the assessment because we were like a credit committee, then we picked up that SAA had a problem. At the time it made a huge profit of about R2 billion and we couldn’t understand that profit of R2 billion. Then when we analysed the accounts we found that the operating profit was very miniscule, around
R100 million. But the other profit was simply because of the hedging that they have done in the books. So, remember, they bought a fleet, they bought about eleven aircraft at the time, mainly for long haul and short haul, and those aircraft cost close to US$2 billion and they hedged

US$2 billion in the market. Then the rand at the time when they entered into the transaction, I think it was around R7/US$ or R8/US$ and then with the hedging what happened was that then the rand started falling. It went as far as R16/US$ at the time and then they lost money, they lost close to

R6 billion at the time and then that profit of R2 billion all of a sudden was a loss immediately. Then when we analysed it we found that they didn’t follow the prudency in doing the hedging policy of the organisation. So while we were engaging with them that’s the time that Maria Ramos had to go to Transnet because her contract was ending at Treasury and she became the CEO of Transnet.


‘During my first year of operations at SAA we cleaned up’


So at that time I was requested by National Treasury to be the CFO for SAA to assist them with that financial problem. At that time SAA was still a subsidiary of Transnet, it was amazing, it was still a subsidiary of Transnet, and under Maria Ramos as the CEO at the time. Then we worked in terms of abolishing the hedge book and looking up the losses, we managed to do that successfully by following prudency, talking to the Reserve Bank, talking to a number of funders and the banks that have actually got a position in that. So we closed it [the hedge book] and we started focusing on in terms of the governance, in terms of risk management, in terms of the right thing. So throughout that process we had a strategy in place and the airline had a loss due to the hedge book and that was around R14 billion. It was for the first time that SAA was experiencing those losses because its balance sheet was very, very good, it was a very capitalised business, even Transnet at that time used to borrow foreign currency from SAA because SAA used to have such a lot of foreign currency, money outside of the country because they were selling tickets outside of the country. Remember, it was the only airline that had the major market share in the long haul and domestic markets. The tickets were sold all over the world and mainly in hard currency. During my first year of operations at SAA we cleaned up and we made a profit of R1 billion and that was a clean profit. That’s when Khaya Ngqula came in as CEO, where I was supporting him. The profit of R1 billion was a very good profit because it was from operations. The bank account moved from having an overdraft to R1.6 billion in the bank account at that particular point in time. Purely because we introduced processes, we were utilising the SAP system and we were using the procure-to-pay system, we wouldn’t pay any of the expenses outside of the system. If people come with memos to say pay for this, we say put it on the system and then we’ll pick it up on the SAP system because it’s a very good system in terms of picking up the audit trail. So then we had a strike because we were negotiating with the unions and unfortunately they saw the profit and they started striking but we managed to clear that strike at the time. Then I had to leave SAA because my intention of going to government as well, it was not to stay for long, it was two years at National Treasury. I went there from the private sector and especially from the banking side, so I didn’t intend to stay for long. Then I left and also because there was a new CEO, SAA was being taken out of Transnet to stand on its own because it was becoming a bigger subsidiary, so to give the CEO an opportunity to have his team and all of that. So I left and I took a sabbatical again of around six months. Then I joined WIPHOLD as a CFO and from there migrated to becoming the CEO of WIP International because WIPHOLD strategy wanted to replicate their model, because they are successful in South Africa, throughout the continent. That’s how I managed to be in the cement industry because while we were working and replicating the strategy of WIPHOLD we managed to come across this cement opportunity and then worked with Jidong, which is one of the largest cement producers in China, whereby we went there, we inspected the factory, we took the SABS to Jidong and from there we started importing the cement because remember in 2006/2008 there was a shortage of cement in the country. So then we imported the cement and then we started talking to them about building a factory in South Africa. To cut a long story short, that factory is now called Mamba Cement in South Africa. So when you see Mamba Cement that is with a brand called Champion, that’s basically the initiative of Jidong and WIPHOLD by bringing the FDI into the country. That’s when I was headhunted from WIPHOLD by PPC to come and be the CFO for PPC because they realised they were looking for new blood and a new strategy because they realised they needed to grow outside of South Africa.

CIARAN RYAN: That’s interesting. The cement industry, of course, is a key indicator of the health of the South African economy from a construction point of view. What’s been your observation there, we are running out of time, so if you can just answer this briefly, but what has been your observation in terms of the sales that are happening in South Africa through PPC and through Mamba, what does that tell us about the state of the construction sector in this country?

TRYPHOSA RAMANO: I think it’s tough, okay, when you see the GDP growth and the construction sector, they go hand in hand. Now we are going into negative GDP, the construction sector is more at a standstill but to revive the economy you need infrastructure development. So the other challenges that the industry is facing, there are too many players, the demand is about 12 million tonnes and the capacity is about 18 million tonnes. There are too many players, there needs to be some consolidation. Number two, there are lots of imports of cement, the government really needs to regulate and stop the imports. When your factories that are producing cement and employing people in your country, and then you make them compete with people who are flooding the cheap imports into the country, it’s not actually good as part of the economic development. So the government really needs to stamp it out and stop the imports and introduce a ban on imports and let the industry grow on its own.


South Africa is a dumping ground for cement


CIARAN RYAN: Are there any import tariffs on imported cement into South Africa at the moment?

TRYPHOSA RAMANO: There aren’t, the only tariffs that is there is the tariff on Pakistani cement. If it has not expired, I’m not sure if it has expired for now but it’s only on Pakistani cement. It’s two factories in Pakistan because they were literally dumping the cement in our country. It was a long process for our industry to fight it and they managed to win that. But now you see other cements coming from other areas in the world, Vietnam and whatever. So the South African government must just make it their problem and say that we have an industry that has been there in this country since 1892, we must protect this industry. We cannot let the imports…cement doesn’t travel far, the moment you see cement coming in here you must know it’s been dumped because cement doesn’t travel far. It’s a low value product that is heavy. The price that you are paying is mainly on logistics. That is why cement factories have to be closer to where the market is in order to reduce the cost of the product. So when you see the imports it’s dumping.

CIARAN RYAN: There was a lot of discussion years ago about there being a cartel in South Africa, there were only three cement producers from memory, how many producers do we have in the country right now?


CIARAN RYAN: Six producers, so there’s way too much capacity and still we have imports coming in and no tariffs on some of these imports.


CIARAN RYAN: Okay, that’s a problem.

TRYPHOSA RAMANO: Exactly and then the demand is about 12 billion tonnes, it’s even lower than 2010.

CIARAN RYAN: Of course, the only other way out of this is for there to be a massive infrastructure programme, where the demand for cement will pick up again, correct?

TRYPHOSA RAMANO: Yes, you need a massive infrastructure programme, you need consolidation of the industry, there are too many players, they must talk to each other and actually reduce the players and then they can work much more efficiently. That cartel thing didn’t help because remember how a cartel works is that they will decide what the price will be, and they will share the market. That’s how the Competition Commission has found that you say you’re in KZN, you’re in Cape Town, I will not come to your market, you decide what the price should be, and the consumers were suffering. That’s basically what the industry was doing. But now after the cartel they have to compete competitively, which was good and that’s why you had new players coming in like Mamba Cement, Dangote Cement, there are too many players in this small country to be producing cement with low infrastructure.

CIARAN RYAN: It’s very interesting that the Competition Commission came to that decision that broke up that cartel…


CIARAN RYAN: It was good, but it created this other problem of too much competition.

TRYPHOSA RAMANO: Exactly too much competition but, remember, competition is for the benefit of the consumer. Competition is good but the problem is you are saying compete amongst yourselves but at the same time you open the borders. It’s the same as the chicken industry.


Solidarity Fund board member


CIARAN RYAN: That’s right and I think the world is moving now towards much more protectionism than we’ve seen in the past. Look at the United States and China, look at what’s happening there.

TRYPHOSA RAMANO: Yes, protect your own industry, protect your manufacturers in your country. When we reach challenges like the ones we are experiencing now, your production facilities in your own country can ramp up. So now in the healthcare with Covid-19 you can see that the global supply chain is actually tight and what happens, countries go to bigger countries that they have relationships with. So the smaller countries are suffering because now you can’t get ventilators because they are diverted to the US or to Europe. So the global supply chain…we can’t rely on one country because we have got too many people who can produce things cheaply. But when the world is at a standstill like now, where we need certain goods, you actually need your own local producers to ramp up. I am happy because I am a board member of the Solidarity Fund and we see all these things while we are discussing the Solidarity Fund, dealing with Covid-19 in terms of some of the PPEs that are required by the country.

CIARAN RYAN: We are running out of time but can you touch on that quickly, the Solidarity Fund, what kind of applications are coming on and how are you adjudicating on these funds, give us a little bit of the background there?

TRYPHOSA RAMANO: Remember that the Solidarity Fund is an initiative that was started by Business Unity South Africa to support the government in dealing with the pandemic. As a result, we had to make a quick intervention in terms of the things that were needed. What we are seeing now like the ventilators, we knew that July and August were going to be the peak and ventilators would be needed. We were quick in terms of ordering the ventilators for the hospitals in the country, but we ordered from outside of South Africa because there were no countries that produced ventilators. But it gave us an opportunity to create an industry of non-invasive ventilators in South Africa. Like now CSIR will be producing quite a lot of ventilators for the hospitals through the Solidarity Fund because the Solidarity Fund gave them and other companies seed money to test some of those ventilators and we found that they are working. So that is an initiative and also in terms of the hospitals, in terms of the food security now, when we were on lockdown we distributed more than R200 million towards food security with the Department of Social Development. Now we are also seeing gender-based violence increasing and we are working we with the Department of Social Development and the Department of Women in terms of curbing the scourge of gender-based violence. I don’t know what is wrong with us in South Africa, we are locked down and then we beat our wives or our sisters or whoever, so these are some of the things that the Solidarity Fund is working on. But the main thing is that things that could have been produced in the country are not available in the country, they are available outside the country. But now we are seeing local production increasing, like the plastic gowns that are used in hospitals, I think there’s a factory in KwaZulu-Natal that is ramping up and producing that. So local production is very important, we are seeing it increasing.

CIARAN RYAN: Okay, Tryphosa, last question, which I ask everyone who comes on CFO Talks, are there any books that you would recommend?

TRYPHOSA RAMANO: The Art of War by Sun Tzu and The Art of War for Women by Chin Ning Chu.

CIARAN RYAN: I have read The Art of War, it’s a great book for business.

TRYPHOSA RAMANO: It’s a great book.

CIARAN RYAN: Okay, fantastic, thanks very much for those insights, I thought that was fascinating and thank you for telling us about the various engagements that you’ve had at SAA, WIPHOLD and PPC, and giving us a little bit of background there into the cement industry. What a fantastic career and I really want to thank you for coming on and sharing that with us. Just before you go I, I just want to give a plug here to the Certified Financial Officer of South Africa designation, which is offered by the South African Institute of Business Accountants, so that is the CFO designation and it really is the Formula 1 of accounting designations. It’s 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. So you’ll be part of an exclusive and powerful network of CFOs and finance executives. As a CFO, which is the Certified Financial Officer of South Africa, you get to share in a wide range of benefits and you gain status as an international finance executive and achieve your listing in the official CFO directory. That brings us to the end of this particular edition of CFO Talks. Once again that was Tryphosa Ramano, who is a charted accountant and a financial consultant, most recently with PPC as the chief financial officer.

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.


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