KPMG on African trail with $100m to spend

BD Live by Sure Kamhunga -- AFRICA is calling, says KPMG, the professional services group which plans to invest $100m over the next five years to strengthen its advisory capacity.

KPMG, with practises in 33 countries in Africa, has already integrated its operations so it can offer a seamless service to clients, says Moses Kgosana, who heads the Africa business of KPMG.

He is assisted by Yunus Suleman, chairman of KPMG Africa and SA, and Anthony Thunstrom, the chief operating officer in charge of the global Africa investment program.

"We saw a gap in our structure and we have integrated the business so that we link both the geographies of the markets we serve and the languages (spoken there) to ensure that we can offer a seamless service," Mr Kgosana says. "(Therefore) six months ago we consolidated the KPMG (Africa) leadership team so that we have one integrated Africa practice under one leader."

The local heads of KPMG operations still retain operational autonomy and are responsible for meeting revenue and business targets. But they will work from the same vision of consolidating KPMG’s Africa footprint.

The investment in Africa by KPMG is opening a new battlefront for the big four professional services groups for clients in the region.

Ernst & Young and PwC have announced similar growth plans. Suresh Kana, the Africa senior partner at PwC last month revealed plans by the group to spend $100m, also over five years, to recruit an additional 8,000 partners and staff. PwC also aims to grow revenue in Africa to $1bn from $600m.

Coincidentally, KPMG is projecting similar revenue growth over the same period.

Ernst & Young has not revealed its revenue growth plans, but its CEO for Africa Ajen Sita recently said the group was pursuing both acquisitive and organic growth in the region. The company has already announced several acquisitions in SA and countries such as Cameroon.

Mr Kgosana says investment in Africa is part of a wider global strategy by KPMG, which has identified fast-growing emerging markets as a source of both revenue and client growth.

"Africa is the place to be and we are excited about what we see," Mr Kgosana says.

Countries such as Nigeria, Kenya, Ghana and Angola are attracting global investors who are seeking opportunities in sectors such as infrastructure, mining, oil and gas.

Mr Kgosana, who describes Africa as a "rising Phoenix", says KPMG will invest the bulk of the money on recruitment specialist staff and beefing up its teams of advisers and other experts.

Mr Thunstrom estimates that KPMG will eventually recruit up to 250 top-level specialists that he calls "gurus" in their areas of expertise, such as banking and healthcare.

An additional 1,000 staff could be recruited each year for the next five years across the region.

"We see ourselves more than doubling our turnover by 2015 or 2016 from about $600m at the moment to $1bn-$1.2bn by 2016," Mr Kgosana says.

"It is a very concerted strategy that is aligned with our global focus on high growth sectors in emerging markets such as mining, oil and gas, infrastructure and healthcare in regions such as Africa, Brazil, India and China," he says.

Mr Kgosana says KPMG has established a healthcare practice that he believes will over time become a key revenue contributor owing to the demand for primary and specialised healthcare services in Africa.

But financial services consultancy remains a key source of revenue and client growth, he says, while there is also growing potential in infrastructure.

KPMG has recently won infrastructure consultancy mandates in the Democratic Republic of Congo and Zimbabwe and is exploring other opportunities, Mr Kgosana says.

Mr Suleman says KPMG is advising local companies to not take lightly the increasing competition for new markets in Africa from foreign investors. He says the days of South African companies thinking they can literally pick and choose markets are over.

SA is no longer the sole gateway to the region as investors can fly directly to regional markets they consider to be attractive, he says.

An example are investors in oil and gas who can choose to be based in Angola, Ghana or Nigeria rather than SA, he says.