PAFA report: Raising the status

Africa’s many countries have finally banded together forming the continent’s first Pan-African accounting federation in order to promote the development of the accounting profession in the region. David Hayes reports on the federation’s first few months in existence and its future plans.

Efforts to raise the status of the accounting profession in Africa and to promote development of professional accountancy organisations across the continent have recently taken an important step forward with the formation of the Pan-African Federation of Accountants (PAFA).

PAFA is composed of 37 professional accountancy bodies from 35 countries in the Africa continent and is the first organisation set up to represent and promote Africa’s growing accounting profession.

"PAFA will accelerate the development of the profession and strengthen the voice of the accountancy profession within Africa and worldwide," PAFA president Sebastian Owuama said at the first general meeting.

"As the economies of African countries continue to grow, the contribution of the accountancy profession to sound corporate and public sector financial reporting and good governance is now more important than ever before."

PAFA’s main objectives include providing a forum for cooperation and assistance among African professional accountancy organisations to raise the status of the accountancy profession; and to promote the development of common technical, ethical and educational guidelines for the accountancy profession in Africa.

The International Federation of Accountants (IFAC) and the World Bank, together with the African Development Bank (ADB), have strongly supported the establishment of PAFA, with IFAC President Goran Tidstrom and the World Bank Director of Core Operational Services for the Africa region Edward Olowo-Okere, among those attending the meeting.

"The formation of PAFA demonstrates the commitment of the African accountancy profession, acting in the public interest, to strengthen its means of collaboration and to further develop the profession to support the emerging economies on the continent," Tidstrom said at the meeting.

Early discussions

Discussions about establishing a Pan-African organisation began back in September 2006 when the World Bank, IFAC and the ADB organised an Africa learning workshop in Nairobi and the idea of PAFA was first conceived. Until now, local multilateral responsibility for developing Africa’s accounting profession has rested with three regional organisations covering different areas of Africa.

Based in Nairobi, Kenya, the Eastern, Central and Southern African Federation of Accountants (ECSAFA) is the largest of the three regional accounting federations serving the continent.

West Africa is served by the Association of Accounting Bodies of West Africa (ACBWA), which has its headquarters in Lagos, Nigeria, while North Africa is served by the Union du Maghreb (UMEX).

Despite all members of the three regional accounting federations expected to become PAFA members, there are still institutes in 16 countries that are not PAFA members which the federation aims to enrol in the future.

"Some 37 members from 35 countries have signed up for PAFA so far. PAFA’s vision is to have member institutes representing all 53 African countries.

In fact, there could be more countries in future as some are splitting up such as Sudan which has split into Sudan and South Sudan," PAFA interim chief executive Vickson Ncube says.

Language challenges

One of the main challenges for PAFA executives will be the use of more than one language across the continent.

"English and French currently are in use in different member countries. For example, ECSAFA meetings are all in English including Rwanda, Burundi and Mauritius where French is spoken on the street, but English is the official language for government and business commerce," Ncube explains.

Prior to PAFA’s formation there has been little contact between the three regional accounting federations ECSAFA, ACBWA and UMEX, and little trans-regional contact among their member accounting organisations.

This will now change as all member organisations will be PAFA members. However, because of Africa’s size and the large number of countries that compose the continent, PAFA’s executive will consider dividing administration into four regions. But because of Africa’s size not all are expected to become operational at the same time.

"PAFA’s challenge is to represent the whole of Africa developing membership in all 53 countries including those without any professional association at present," Ncube says.

The board agenda

Ncube, who is also the ECSAFA chief executive, says the boards main plan for PAFA’s first year is to bring awareness of the newly formed organisation to the African continent and "to international stakeholders including IFAC, the World Bank, the ADB and United Nations Conference on Trade and Development. Another target is to get the PAFA secretariat up and running, which is no small task".

PAFA’s policy is all member countries should adopt IFRS, International Standards on Auditing (ISA) as part of wider efforts to encourage foreign investment, spur economic development across the continent and raise the performance and status of the accounting profession across Africa.

"In the medium and long term we will be looking at the development of technical and leadership competencies in the accounting profession. For example, the harmonisation of accounting education and training across our member countries, which is not an easy thing to do," Ncube explains.

He also notes that ensuring PAFA’s financial sustainability will also be an important task.

Facilitating the formation and development of professional accountancy bodies in PAFA countries is another long-term goal, along with developing PAFA’s influence in international bodies as the federation’s members seek to expand African accountants’ contribution to global development of the accounting profession and standards.

"Strengthening PAFA’s linkages with governments and developing transparency of corporate governance and of African financial management agencies are other long-term targets," Ncube concludes.

Source: The Accountant.