The formulation of a problem is often more essential than the its solution, which may be merely a matter of mathematical or experiential skills – Albert Einstein

It is said, “Acknowledge your own deficits and weaknesses, and nobody will be able to tell you anything new about yourself.” I stand by this principle in life, simply because it allows one to move forward. In the very same breath, I believe in being a loyal citizen of the Republic of South Africa, and in doing so believe that constructive criticism is a cornerstone to improving the implementation of the pillars of democracy.

Whilst South Africa’s prisons have been classified as inhumane, our government has been classified on many occasion as being rife with corruption and plagued with crony-ism. We have lost the top spot as Africa’s fastest growing economy and our manufacturing sector is in a downward spiral – though there are sectors that still make South Africa revered by the rest of the world.

Announced at the World Economic Forum (WEF) in September, South Africa for the fifth year running was awarded the number one country in the world for its auditing and reporting standards. All on its own, this standard lends toward the might of the of the skills base at the highest levels in the world.

In 2013 the FSAP (Financial Services Assessment Programme) found and reported that, “South Africa’s sophisticated financial system is fundamentally sound and that the regulatory framework is modern and generally effective.”

This was also due to the emergence from the 2008 global economic crisis. Due to the management of reserves and budget surplus, South Africa emerged fairly unscathed from the 2008 crisis and volatility shocks of markets during and beyond the crisis, as well as a solid financial and corporate structure.

We will however explore what this really means; In order to achieve this feat, South Africa has had to adopt and implement standards that will level the playing field within the economic and financial atmosphere. This then allows for easier mechanisms of measure and accountability.

In Africa only 23 accounting organisations are members of the international federation of accountants. Then there is the pan-Africa Federation of Accountants with 39 members from 35 countries that looks after the all the accountancy bodies in Africa – sadly the statistics only account and reflect 90,000 members from across the continent. Perspective arises from the fact that Africa has a population of over one billion people. Out of the 90,000 members 80 percent are from three countries – 35,000 from Nigeria; 32,000 from South Africa and 7500 from Kenya. The remaining 20 percent is from the rest of the continent.

This brings into question the levels of corruption related to mineral resources and illegal outflows from the continent. Certainly more African countries need to align and implement their fiduciary legislation and standards. South Africa, from this perspective can play the lead role in assisting their continental counterparts to adopt and implement international governance standards. Along these lines the political will may also present the way forward or lack thereof as no fruition will be maintained with the political will leading the race.

The standards held within the profession thus acts as the gate-keepers for governance and accountability. Ever since the Enron saga there has been significant levers, at an international level, put in place to tighten controls. However, government and corporates all have to adhere to these guidelines. The auditing industry merely captures data that reflects results and compliance.

Some realities that come to the fore directly related to this achievement by South Africa includes;

• The African continent needs to do more to elevate the graduation of skills into the financial and corporate sector.
• Education in the financial sector obviously requires a congruent strategy to promote the sector. Across the continent, more chartered accountants and professional accountants need to be channelled into all sectors.
• Consider that South Africa regularly lists the top 500 companies across all sectors that are of significant size – then consider the amount of capital inflows through just infrastructure programmes such as energy, minerals, agriculture, aid, medical investment and financial services.

On the flip side, as much as Africa requires broad financial standards implementation, it will do well to steer clear of over regulation. Red-Tape in Africa, in particular South Africa is one of the main hindrances of smooth governance and efficiency, specifically in the public sector.

Taking the debate a bit deeper, we have recently seen the emergence of the BRICS Development Bank. This impacts the future of the sector significantly in that it proves that Africa renders the top emerging markets as a viable nest for investment. Emerging markets have displayed leadership in the form of China, which has proven industrial development and leadership for BRICS countries and lastly that BRICS challenges the universal status quo of the financial world order.

If Africa with the guidance of South Africa’s financial system, we could see Africa leading itself towards its own promise and destiny. It all starts with the ability to govern ourselves, for our own prosperity and good.