Reform of accountancy market

The government’s intervention is critical for the emergence of accounting bodies to champion local consumer interests

COMMENT | PATRICK OMONY | The recent Economic Summit organised by NTV saw the Minister of Finance make a desperate plea for ideas that can spur the economy to enable him increase his revenue collection to service the alarming national debt.

The minister should consider an idea of a quid pro quo intervention to bolster the performance of the accountancy market. This sector is totally insensitive to the economic misery of, especially, small accounting firms. It is also experiencing alarming unemployment of accounting related skill labour estimated at 10,000 and projected to reach over 25,000 by 2030, according to provisional figures from the National planning Authority.

The Ugandan accountancy market is conservatively estimated to have a current potential of Shs600 billion with capacity to generate over Shs190 billion in taxes while creating over 18,000 direct and indirect new quality jobs at an over 10% growth rate in its initial stage if the right strategy and approach is applied to this sector.

Despite this potential, the sector’s strategy to generate market demand for its services through hype, drama awards and legal coercion has continued to post miserable results. The 2018 sector performance figures showed that firms generated less than 20% of this market potential in total revenues and only contributed 40 billion in total taxes. “A clear case of doing what they ought not to do and leaving undone that what they ought to do”.

Whereas the bulk of the untapped market is within the market niche of the small certified and uncertified firms, over 80% of them are in an economic survival mode with weak negotiating power. This is due to their market offerings of low-value low-demand heavily commoditised services most of which are being phased out by automation or can be done by low skilled persons using new software technology.

Whereas the market is increasingly demanding new forms of accounting services that add real value to them, the accountancy fraternity has continued to demonstrate a lack of character and vision to conjure up the right strategy to deliver. This inability stems from a colonial-mindset-build that has blinded accountants to their local context and gotten them pride fully fixated on doing things (compliancy) as dictated to them by their foreign masters regardless of its benefit to local consumers who are now fighting back.