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Africa gets into your heart, into your blood,” said Gargett, who is an assurance partner at PwC and is head of its Australia Africa Practice. In support of this statement he cites conversations he engaged in with staff at a Lilongwe hotel. Admitting a deep affection for the small east African nation of Malawi, of which Lilongwe is the capital, he explains: “We were in this lovely little hotel in Lilongwe and the staff there were just magnificent. Having a drink and over dinner, staff members were quite happy to chat about life and what they did. These people were in well-paid jobs by local standards, but said that their entire salaries went on rental, bus fares and food.

“They basically told us that they were working flat chat to stand still,” Gargett said, citing the falling value of the kwacha and rising fuel costs for land-locked Malawi. “They said that they had no money to put aside for the future or to buy their own homes, and any extra they earned went to dependent family members. It breaks your heart that these extraordinarily beautiful people with wonderful hearts who lead such difficult lives treat you with such friendship and are willing to support and serve you.”  

“How do you fix that?” is Gargett’s rhetorical question. Gargett said it was his dream to see a “fixed” Malawi but adds that this would require outstanding leadership to step out and drive change in a country with many challenges.  

For example in 2014, it was discovered that up to $100 million of donor cash had been pilfered by officials in what has now become known as ‘cashgate’.

So much for wishlists and navel-gazing.

PwC Australia’s interest in Africa is about working with companies that operate there, which are primarily in the mining sector, helping them along some of the challenging paths they tread.

PwC has the largest network of all the professional services firms on the African continent with representation in 34 of its 54 countries. In the other 10 countries, PwC has affiliate offices so there is saturation coverage across the continent. These offices, spread out from Cape Town to Cairo and Maputo to Abidjan, employ about 9000 people.

Gargett said the Australia Africa Practice was supported by an Australian team which understood how business operates in Africa and is connected to African partners. He has been with PwC for the past 16 years, starting out at what used to be Australia’s capital city for mining, Melbourne.

PwC traditionally was the audit firm for many of the majors which were based in Melbourne – of which many, more recently, had either moved West or been taken over.

“So we decided to focus on the next tier of juniors coming through and rebuilt a practice on them. This rebuild began in Melbourne, and then the opportunity came about four years ago to move to Perth, where I had the mandate, time and space to get to know the sector.”

Gargett adds that all PwC’s accounting-audit peers have dabbled in the junior space and sometimes reaped rewards when one of their clients emerged from this small end, such as Fortescue Metals Group or Evolution Mining.

“Those firms which had stayed with such companies through the challenging times were rewarded when times were good – and loyalty was built. We decided that it was no longer good enough to say to mid-tier clients, ‘now that you are big enough, we will spend some time loving you’.

PwC had the specific intention to walk and talk its way around the mining enclave of West Perth and get to know as many people as it could to build the business.

“So that was what ultimately led me to Africa. After cold calling and meeting hundreds of people and attending countless events the thing which came up regularly was that there was a very large number of junior companies with projects in Africa. The comment was almost universally the same: mineral prospectivity is huge and generally the governance and stability of most countries is improving.

“But they would also add: ‘damn, it is hard work’,” Gargett said, highlighting the usual barriers of culture, language, lack of sophistication of markets, weakness of the institutions, time zone differences and the tiresome nature of travelling between the two continents.

“We looked at it and said, wow, there’s an opportunity to do something and be a part of making all of that easier. And so we did a mapping exercise: we drew a map of where we had PwC offices and where we just had affiliates. And we found that we had become one of the biggest networks on the continent,” he said. It was a formidable network, the usefulness of which did not escape the notice of Austrade. And this interaction has become reciprocal, with PwC staff connecting well with Australian commissioners working in Africa.

Naturally, the PwC presence varies, but the strongest representation maps well against the presence of Australian companies, including in South Africa, Namibia, Tanzania, Ghana, Botswana, Zambia, Mauritius and the Democratic Republic of Congo.

Mining companies like to enlist the assistance of companies which, like PwC, have large footprints and have “done it all before”.

“Our teams in Africa are very well connected and know the right people to talk to. Also, as part of PwC’s social licence to operate, when we visit a country we make a point of helping to lift the skills of our profession, so we teach and do presentations. I might do a presentation on key trends in the mining industry, sometimes in conjunction with that country’s mines minister or maybe the department secretary. Then we will do a training session with our team on accounting, or accounting technology, so that we teach, train and lift the skill base over time.”

This social licence to operate goes further than skills transfer to PwC’s African teams. Gargett recently joined the board of the Australia-Africa Minerals and Energy Group, the advocacy group which represents the interests of Aussie miners in Africa. Gargett was joined on the board by Andrew Dinning of Sarama Resources and Resolute Mining’s John Welborn.

“I believe that if you are willing to invest your time, the industry will recognise this,” Gargett said. And invest time to advance some of AAMEG’s causes, PwC certainly has. It was the driving force behind drafting guiding documentation to present to federal government on fringe benefit taxation issues for Australian expatriate fly-in, fly-out workers. If successful this will reduce the cost of Australian’s working in Africa making our labour more competitive. 

“AAMEG is a natural partner for us and so we spend a fair bit of time on their issues, including membership and marketing.”

Again, the relationship with AAMEG is reciprocal. PwC may have federal government connections in the Department of Treasury that AAMEG otherwise would not, and on the other hand, it was sometimes useful for PwC to partner with AAMEG to get things done, as a member of the industry body.

Gargett and his PwC Australia Africa Practice colleagues are continually applying their thoughts on how to make Africa easier for companies and as a result of research, have produced ground-breaking working papers dealing with many issues, including governance and taxation which are useful for companies and governments alike.

The most recent of these was a 20-page report, released in August 2015, titled Over Taxed? and presents a truly fascinating hypothetical comparison on how the fiscal regimes of four popular African mining jurisdictions affect the establishment of operations there.

Gargett is swift to point out that the question mark following the words Over Taxed? was both conscious and deliberate, as taxation was not always the sole limiting factor in a company’s decision to mine an orebody.

The inspiration to write Over Taxed? came from Gargett’s interaction with the Tanzanian revenue  authorities, after he put it to them that Tanzania had enormous prospectivity for gold, but had not had one major new gold mine built in the country in the preceding decade, when the gold price had risen by more than 400%.

The methodology for preparing the Over Taxed? report, on the surface, appears simple and logical. PwC took a standard gold project and normalised factors such as power costs, access to skilled labour, input costs for Namibia, Ghana, Tanzania and Burkina Faso. “We know the world does not really work like this, but we wanted to comment purely on the fiscal regime. Would this gold mine generate sufficient return thresholds in order for the company to invest the money upfront?”

The results were enlightening. Based on the desirability of an internal rate of return of 25%, the prize winner was Namibia at 26.7%, followed by Ghana at 25%, Tanzania 24.9% and Burkina Faso at just 19.7%.

Gargett said Namibia would definitely go ahead, Ghana and Tanzania would be “maybes” and the hypothetical mine would not be built in Burkina Faso.

This report, along with Gargett’s self-penned Stability and Certainty can be found on PwC’s website, and should be prescribed reading for Australian adventurers and the government treasury officials of the more exotic African destinations.

Gargett sees the next step would be to engage with African governments to see how they could make their countries more attractive for investment.

“This is not dissimilar to what we are trying to do in Australia with the federal government’s tax inquiries. Amongst other things there is a realisation in Australia that taxation should not all be about a big stick for the naughty guys, but how we could incentivise people to generate economic activity by offering them a carrot.”

Gargett believes the time for some African governments to do some serious fiscal introspection is right now, during these incredibly tough times for the mining industry.

“The junior sector cannot get funding because the equity markets are still so difficult.  We are seeing a few little green shoots coming through, but it is really difficult to get funding, especially for African projects.

“So African governments need to encourage and stimulate the exploration and mining companies to their countries by having in place attractive fiscal regimes so they can become the first movers when the cycle swings back. The first projects built will benefit the most – for the companies and the country. And that is the next evolution of what we are doing.”

And for the mining people already on the ground in Africa, Gargett muses: “I love doing what I do, I love getting out to mine sites, it is the favourite part of my day job. I always say to my clients ‘I will never know your mine as well as you do, you live it and breathe it every day’ … but what I can bring to you is the fact that I have been to many different mines this year and very often can offer advice on smart ways of doing things identified over time at other operations.”

Gargett is in Africa at least three or four times a year, for a minimum of a fortnight at a time. “I try to get to at least three countries each time, depending on the clients I am dealing with. We are trying to spread our connections, but it is like everything, it is all about relationship building. Once you have sat with people in their office, had a meal with them, had a drink together, you build those connections. People always talk about ‘African time’, I have found that once I’ve spent some time with my teams and clients there and genuinely show that I am interested in investing in their countries, you get responses pretty quick. Not always, but it makes a huge difference having that face-to-face relationship. That’s what I keep telling the CEOs here in Australia, that they have to spend time there on the ground, boots and all. The governments want to see them there, especially if they are joint-venture partners; the local people want to see them, the head guy has got to be on the ground. The CEOs who try to run it from Australia and get over there once a year tend to fail. It is all about relationship building.”