Wrritten by Staff Writer
“Growing up in my dad’s business, accounting was natural for me. In high school, I always received the accounting awards. It was a natural progression into the accounting industry,” Ehsaan Moosa, told the CFOClub podcast.
Moosa hasn’t stopped achieving, and is the Financial Director of Komatsu Africa Holdings. He recently shared with CFOClub the knock on effects of load shedding. Komatsu supplies mining, construction, earthmoving and utility equipment all industries especially hard hit by power cuts.
Load shedding threatens business growth
“Currently, our business is doing well, financial indices are positive,” says Ehsaan Moosa, the financial director of Komatsu Africa Holdings, a company which supplies mining construction and earthmoving equipment.
“However, the economic decisions that are made next year, especially around load shedding, are key,” says Ehsaan. “load shedding hasn’t had a detrimental impact on our business up to this point, but we know that businesses are struggling and that it could have a detrimental impact across the industry.”
Ehsaan’s podcast appearance came within a week of negative fourth quarter 2022 GDP growth figures for the South African economy. In particular, mining and quarrying, and construction saw negative economic growth for 2022.
Load shedding also contributes to market volatility
“Our biggest challenge is the ongoing market volatility. Obviously, we know US markets are extremely strong, but it’s the uncertainty of the rand that’s the biggest challenge. The volatility in the exchange rate markets, being unsure what stage of load shedding we are on each day, these cause volatility in our business and that’s the challenge we deal with daily.
“It’s become almost second nature to have market traders open on your desktop, to stay on top of exchange rates as the rand remains weak on the back of a strong US dollar, compounded by other issues like load shedding.”
A recent PwC report found that power cuts cost the SA economy 5 percentage points last year. Meaning the economy could have grown by 7 percent instead of the only 2 percent growth. PwC expects the country to continue to underperform this year due to rolling blackouts. “Hopefully these problems can be resolved, and this country’s true potential can be realised,” says Ehsaan.
Regardless of load shedding, CFOs can’t rely on IFRS alone
Like many CFOs, Ehsaan made the leap from an auditing to commercial and operational role. “I learnt a lot of the key skills I need in the auditing profession. However, as a modern CFO, you cannot only rely on your IFRS textbook or your technical abilities. You’ve got to think more analytically, that’s the way the world has moved. You’ve got to have business acumen skills,” he says.
You can listen to the full interview with Ehsaan Moosa here.