In this episode of the CFO Club podcast, we have the privilege of speaking with Dr. Lawrence Nsibandze, a highly experienced and accomplished Chief Financial Officer (CFO) of the Public Service Pension Fund in Eswatini. With a career spanning over two decades, Dr. Nsibandze has navigated the complexities of financial management, audit, and strategic leadership. He brings invaluable insights into the evolving role of the CFO, highlighting the importance of balancing technical financial expertise with strong leadership and communication skills.
Nicolaas van Wyk:
Good day, CFO Club members, prospective members, and our CFO audience. My name is Nicolaas van Wyk, and I’m hosting another interesting podcast for CFO Club with Dr. Lawrence Nsibandze. He is the Chief Financial Officer of the Public Service Pension Fund.
I recently met Dr. Lawrence when we were both attending a Marcus Evans event called the 7th CFO Africa Summit. The CFO Club is a media partner for this annual event, which was very well organized. The event featured amazing speakers and a great venue, with most attendees being African CFOs. Our South African contingent was quite small, something I believe we need to address. It’s clear that African CFOs are highly focused on education and development, perhaps because there’s so much investment and growth happening in Africa.
This engagement piqued my interest, and I was eager to invite Dr. Lawrence to join me at the CFO Club. As CFO of the Public Service Pension Fund, he plays a crucial role in managing pensions for thousands of public servants and making key investment decisions. There are, of course, rules and criteria around what they can invest in. Given the rise of options like cryptocurrencies and ESG investments, we will delve into those topics during our discussion.
Before we get into that, let me share a bit about CFO Club. It started in 2016 as a brand of the Chartered Institute of Business Accountants (CIBA), which is one of the larger professional bodies in South Africa, with about 10,000 members. Our membership extends to Namibia, and we’ve expanded to include CFOs through CFO Club. One of the benefits we offer is these podcasts.
We also annually host a tour to meet with our European sister entities. CFO Club is part of the international CFO Alliance, which works with regulators and decision-makers across Europe and elsewhere to develop a global competency framework for CFOs. With globalization, there’s a growing movement in the European Union to standardize the role of CFOs, ensuring that they possess the necessary skills and experience to work internationally. It’s a topic worth discussing with Dr. Lawrence, as CFOs work in diverse industries and have varying personality types, outlooks, and approaches to risk.
This year’s tour will take us to Verona, Italy, a city famous for Shakespeare’s Romeo and Juliet. While based in Bologna, we’ll visit car manufacturers like Ferrari, Lamborghini, and Ducati as part of a mini-MBA program. There will also be trips to Florence, Venice, and possibly Milan. If you’re interested in joining next year’s tour, please join the club—it’s a great opportunity to expand your network. Past tours have led to real business deals, such as when one of our members signed a distribution agreement with a Mexican car parts manufacturer.
In addition to podcasts and tours, CFO Club offers blog articles, technical committees, and events focused on the four roles of the CFO—Steward, Operator, Catalyst, and Strategist. We encourage all CFOs to join the club and ultimately apply for the CFO (SA) designation through CIBA.
With that introduction, let’s welcome Dr. Lawrence. Thank you so much for joining us today. Could you start by telling us a bit about yourself, your current role, and how you got there? Also, what did you study, and what has your career path been like?
Dr. Lawrence Nsibandze:
Thank you very much, Nicolaas, for having me on your program today. My name is Lawrence Nsibandze, and I began my career back in 2001 with the PriceWaterhouseCoopers LLP as an audit clerk. I spent about four and a half years there, doing external audits for clients under international standards. After that, I joined Nedbank Swaziland Limited, where I worked as an internal auditor for two and a half years. This role allowed me to review the effectiveness and adequacy of internal controls.
I then moved to a local development and savings bank called Eswatini Bank, where I was a senior internal auditor for about three and a half years. In this role, I introduced a risk-based auditing approach and later became the bank’s financial manager. After a year in that position, I received a scholarship to pursue an MSc in Investment Management and Risk Finance at the University of Westminster in the UK.
Upon returning to Eswatini, I took on the role of corporate business manager at Eswatini Bank, where I was responsible for relationship management and issuing loans to large companies. After three and a half years, I joined the Eswatini Electricity Company (EEC) as Chief Financial Officer. I was eager to grow in this area, especially as a general accountant in South Africa. I spent four years in that role and later became the general manager of support services, where I stayed for three years before leaving EEC.
I then became a partner in an audit firm called Nalawa Professional Accountants, based in Mbabane, Swaziland, for about two years. After Nalawa, I joined the Public Service Pensions Fund, which is a parastatal under the Eswatini government. I have been with the pension fund for about three years as the Chief Financial Officer.
In terms of my education, I hold a BCom in Accounting from the University of Eswatini and a postgraduate diploma from the University of South Africa (UNISA). I also completed a BCom Honours and CTA with UNISA and became a Chartered Accountant (CA) in South Africa in 2010. In addition to my MSc from Westminster, I completed a Doctorate in Business Administration in 2021, specializing in financial management and strategic finance.
Nicolaas van Wyk:
What an impressive career path! It’s clear you’ve dedicated yourself to continuous learning, which is an essential lesson for all of us.
You’ve mentioned your strong auditing background. I’d like to ask, how has your experience in auditing influenced your current role as CFO? Does it provide a good foundation, or does it sometimes limit your perspective, given that auditing can be quite different from the strategic finance required in a CFO role?
Dr. Lawrence Nsibandze:
The internal audit experience was very important for me because it introduced me to the risk-based auditing approach, focusing on the internal controls within an organization. As an internal auditor, I engaged with the top management to understand how they managed risks, evaluated the effectiveness of internal controls, and identified improvements. In Eswatini, the field isn’t very large, so as an auditor, you must be an all-rounder, moving from one division to another—operations, retail banking, corporate. This gave me a broad understanding of internal controls and how they operate across different areas of the business.
Now, in my role as CFO, I’ve carried forward this knowledge into financial management. We develop financial strategies, direct the finance team, liaise with auditors and regulators, and produce annual financial statements. A big part of our work is ensuring compliance with International Financial Reporting Standards (IFRS). My background in audit has really helped me marry internal audit skills with compliance, ensuring that everything we do aligns with country-specific regulations like taxation laws.
Additionally, having done external audits with Price Hotels Group, I audited various clients, reviewed financial statements, and provided recommendations to improve their accounting systems. All these experiences shaped the way I approach my current role, ensuring a strong foundation of compliance and strategic financial oversight.
Nicolaas van Wyk:
That’s fascinating! You’re currently based in Eswatini, formerly the Kingdom of Swaziland, and I see its GDP is about $4.7 billion, with significant growth from 2000 to 2010, although it has remained fairly stable since then. For our listeners who may not be familiar with Eswatini, could you give us some insight into what drives the country’s economy?
Dr. Lawrence Nsibandze:
In Eswatini, the economy is largely driven by sugarcane production. We export a significant amount of sugarcane, and the manufacturing sector is also growing. The financial services sector, including banks, insurance companies, and pension funds, has expanded significantly. There’s a popular saying here that sugarcane is the “Swazi gold” because of its major contribution to our economy. We export sugar to the European Union, the United States, and South Africa.
Another major contributor to the economy is a US-based company called Conco, which produces the concentrate for Coca-Cola. Conco chose Eswatini as its base, and its second-largest manufacturing facility is in China. The beverage sector, led by Conco, plays a significant role in our national GDP.
Nicolaas van Wyk:
That’s very interesting. Now, can you tell us a bit more about the Public Service Pension Fund? What’s its mandate, and where does your revenue come from?
Dr. Lawrence Nsibandze:
The Public Service Pension Fund is a statutory pension fund created by the Eswatini government in 1993. We currently manage the pensions of about 44,000 civil servants. Our revenue comes primarily from the Eswatini government, which contributes around ZAR 107 million per month. The government contributes 15% of each civil servant’s basic salary, while the individual contributes 5%.
Our mandate comes from the Ministry of Public Service. We take these contributions and offer benefits to retirees, such as pension payments at the age of 60, calculated using a formula set in law, as we are a defined benefit fund, not a defined contribution fund. We also provide death benefits, calculated based on specific formulas. Any excess contributions are invested in various assets, both offshore and locally in Eswatini and South Africa.
Nicolaas van Wyk:
That’s a critical role you’re playing, ensuring that 44,000 people can retire comfortably. Pension funds are a complex field, especially with the demographic shifts we see in Europe and Asia, where birth rates have declined. What impact does this have on your pension fund, and how do you navigate the financial challenges to ensure long-term solvency?
Dr. Lawrence Nsibandze:
Indeed, demographic shifts are a critical consideration. Before we finalize our financial statements, we always conduct an actuarial evaluation. The population of Eswatini is around 1.2 million, which is relatively small, but we stay ahead of the game by consistently evaluating the fund’s solvency.
One challenge we faced when the fund was established in 1993 was that the government initially funded only 28% of the total liability. This shortfall meant we had to implement strategies to close the gap. Today, our funding level is around 86%, and with the help of consultants and investment managers, we are working towards fully closing that gap in the next 3 to 5 years. Despite not receiving additional funding from the government, our investment strategies have been successful in keeping the fund solvent.
Nicolaas van Wyk:
It’s reassuring to hear that you’re working with a team of experts to navigate these challenges. Investment decisions are key for pension funds, especially when balancing risks and returns. How do you approach investment decisions, particularly given emerging trends like cryptocurrencies and ESG (Environmental, Social, and Governance) requirements?
Dr. Lawrence Nsibandze:
That’s an excellent point. When making investment decisions, we focus heavily on ESG principles. Renewable energy projects are a big priority for us. Traditional energy production using coal isn’t environmentally sustainable, even though we have significant coal deposits in Eswatini. Instead, we encourage investments in solar and hydroelectric power.
For example, while hydroelectric power is a viable option, we limit its use to peak hours—mornings and evenings—when energy demand is highest. This approach protects the environment by preserving water levels and preventing damage to ecosystems, such as fish and other aquatic life, in our dams. If water levels drop to 40%, we stop production to avoid cavitation, which can damage turbines. We also purchase electricity at lower costs from the Southern African Power Pool when necessary.
Our investment goal is a return of CPI plus 5%, and we assess each project individually to ensure it aligns with our overall strategy. We remain open to innovative renewable energy projects, and we actively look for partners in this space.
Nicolaas van Wyk:
It’s clear that your role as CFO extends far beyond the office. You work closely with investment managers, actuaries, and even at the operational level, ensuring the right decisions are made for both the pension fund and the community. In South Africa, we’ve faced challenges with vandalism and poor management in our power sector, which directly impacts pension returns. The choices we make as a society have far-reaching consequences.
What’s your perspective on how communities, government officials, and workers can better understand the financial impact of their decisions?
Dr. Lawrence Nsibandze:
That’s a great question. It’s essential for everyone to understand how their actions affect the larger system. As a CFO, I must balance the needs of various stakeholders, from government to community members. When we start a project, especially something like a hydroelectric or wind power plant, it’s important to engage with the community early on. This includes ensuring proper compensation for those who may be displaced and working closely with local leaders and project managers.
For example, if we’re developing a renewable energy project, we must explain its long-term benefits to the community and ensure they’re adequately compensated for any disruption. This builds trust and ensures that the project can move forward smoothly.
Nicolaas van Wyk:
You’ve touched on the broader role of the CFO—balancing finance with strategy and community engagement. It’s a far cry from the traditional view of accounting. Some young people today seem hesitant to pursue a BCom in Accounting, seeing it as boring or not well-paid. However, after hearing about your diverse and exciting career, I’m rethinking my perspective! Could you elaborate on the difference between being a CFO and an accountant?
Dr. Lawrence Nsibandze:
There is indeed a big difference between being a CFO and an accountant. An accountant primarily focuses on the figures—recording transactions, preparing financial statements, and ensuring that the books are balanced. They work closely with the day-to-day financial data, from the original books of entry to trial balances and financial reporting.
A CFO, on the other hand, takes a much broader view. The CFO’s role includes stakeholder management, working with government officials, regulators, auditors, financiers, and investment professionals. You’re involved in high-level decision-making, often working with the CEO on profit and loss management, developing future strategies, and even turning around the company if it’s not performing well.
You also must be an all-rounder, understanding all aspects of business and the projects that come before the board or investment committee. You must be able to offer insights, not just into the financial health of the company, but on the strategic value of projects and initiatives.
So, while accountants focus on the numbers, a CFO needs to have a much wider perspective, ensuring that all aspects of the business are aligned to create long-term value.
Nicolaas van Wyk:
That’s a great summary of the broader responsibilities a CFO carries. I’ve noticed on your LinkedIn profile that you’ve undertaken several advanced qualifications, such as an MSc in Investment Management, as well as a DBA. In many cases, financial managers who aspire to become CFOs pursue an MBA to broaden their management skills. What advice would you give to someone currently in a financial management role who aims to become a CFO in the next 8 to 10 years?
Dr. Lawrence Nsibandze:
That’s a very good question. My first piece of advice would be to qualify as a Chartered Accountant (CA). Start by doing your articles and gaining that foundational experience. It’s also important to join a network like the CFO Club to understand how CFOs approach their roles and how they engage with the people around them—whether they’re colleagues, clients, or stakeholders.
Once you’ve obtained your CA qualification, I recommend taking at least one management course, even if you don’t have the resources to pursue an MBA. An executive development program can give you critical soft skills that are necessary for serving the community and your company.
A CFO needs more than just technical knowledge; they need to understand the people they’re working with and the broader environment. It’s essential to develop leadership, communication, and strategic thinking skills. Joining a club like CFO Club and earning the CFO (SA) designation can also help set you apart, providing you with the recognition and framework you need to succeed.
Nicolaas van Wyk:
That’s solid advice. I like the focus on understanding both the company and the community it serves. Continuous learning is key, and it’s clear that your journey—from obtaining multiple qualifications to gaining diverse professional experience—has helped shape you into a well-rounded CFO.
In Europe, there’s currently a push to standardize CFO skill sets across the European Union. The goal is to ensure that CFOs have a common framework of competencies that employers can rely on when hiring. What is your view on this move toward standardized CFO qualifications?
Dr. Lawrence Nsibandze:
I think it’s a very positive initiative. Standardizing the skills needed for CFOs will provide clear guidance for those who wish to pursue this career path. Having a framework with defined competencies helps ensure that CFOs are equipped to handle the various challenges they may face, whether they’re in Europe, Africa, or elsewhere.
However, it’s important to consider the regional context as well. For instance, in South Africa and the UK, about 70% of CFOs are Chartered Accountants, but in the US, only around 27% of CFOs hold a CA qualification. Instead, many US CFOs may have a background in finance through qualifications like the Chartered Financial Analyst (CFA) designation.
So, while a standardized framework is helpful, there should still be flexibility to account for different educational and professional paths. Each region has its own unique needs and expectations for CFOs, and the framework should be adaptable to accommodate these differences.
Nicolaas van Wyk:
That’s a great point. There’s no one-size-fits-all approach but having some form of guidance can be very helpful for aspiring CFOs. You’ve touched on the importance of a broad skill set—both technical and managerial. In your experience, how important is it for CFOs to have strong leadership and communication skills, in addition to their financial expertise?
Dr. Lawrence Nsibandze:
Leadership and communication skills are absolutely critical for CFOs. As I mentioned earlier, a CFO’s role goes beyond crunching numbers. You’re constantly engaging with various stakeholders—government officials, board members, auditors, and the broader community. You need to be able to articulate financial strategies clearly and make complex financial concepts understandable for non-financial stakeholders.
Good communication is essential when presenting reports to the board or investment committee. CFOs must provide financial insights and the broader strategic implications of those numbers. And strong leadership skills are necessary to manage your team effectively, inspire them to perform at their best, and help them grow professionally.
In many ways, a CFO serves as a bridge between different parts of the organization—operations, strategy, finance, and external stakeholders. To succeed, you need to have both technical financial skills and the ability to lead, communicate, and collaborate effectively.
Nicolaas van Wyk:
I couldn’t agree more. You’ve painted a very compelling picture of what it takes to be a successful CFO—broad knowledge, leadership, and the ability to connect with people at every level. Before we wrap up, I’d like to ask you about something we feature on CFO Club—our book club. Could you share with us a recent book you’ve read that had an impact on you?
Dr. Lawrence Nsibandze:
Yes, certainly. One book that I’ve found particularly insightful is Investment Analysis and Portfolio Management by Frank Reilly and Keith Brown, published in 2019. The book provides in-depth knowledge on managing portfolios, understanding the risks associated with different types of investments, and how to generate returns.
It covers a range of topics, from equities and fixed income to real estate and private equity. One concept I found especially interesting is the distinction between Real Estate Investment Trusts (REITs) and Real Estate Operating Companies (REOCs). The book outlines the different strategies you can use to manage risk in these types of investments and provides valuable insights into portfolio diversification. Understanding these risks and strategies has been very beneficial in my role as CFO, particularly when making investment decisions for the pension fund.
Nicolaas van Wyk:
That sounds like a must-read for anyone interested in investment management! Thank you for sharing that recommendation.
Dr. Lawrence, it has been an absolute pleasure having you on the podcast today. I’ve learned a lot, and I’m sure our listeners have too. Your insights into the role of a CFO, the Public Service Pension Fund, and the broader economic environment in Eswatini have been incredibly valuable. We look forward to having you back on the podcast next year to see how your investment decisions have panned out.
To our listeners, please connect with Dr. Lawrence Nsibandze on LinkedIn—his profile is under Lawrence Nsibandze. And if you’re working on a major project that could benefit from pension fund investments, don’t hesitate to reach out to him. Thank you again, Dr. Lawrence, and thank you to all our listeners for joining us on another episode of CFO Club.
Dr. Lawrence Nsibandze:
Thank you very much, Nicolaas, for giving me this opportunity to speak today. It’s been a pleasure to share my experiences with you and your audience. I hope the insights from today’s discussion will help many people in your network. Thank you, and goodbye.