The Africa region is experiencing slightly higher than global average growth at 3.2 percent compared to 3 percent globally, with North Africa growing at 4.2 percent, and Sub saharan Africa 2.7 percent, according to IMF figures. The picture is mixed however, with Sudan in negative growth and Libya leading at 12.5 percent. Domestic political and economic conditions vary, and leading economies, including Nigeria and South Africa have experienced sharp currency declines. Here we analyse the economic data coming out of the region, in terms of growth, productivity, investment including FDI, currency and commodity prices as well as the geopolitical influences, including Russia and China, that are shaping the economies of nations. We also take in the breadth of new central bank and regulatory policies in major countries, as well as the development of pan African initiatives, including the African free trade area and movements towards further currency and monetary union. In this opening session the Economist Intelligence unit takes in the breadth of change across the region in 2023, including the impact of new conflict in the Middle East and the effects of climate change, and predicts the growth outlook of nations throughout Africa for 2024.

Nigeria’s currency has fallen by 50 percent in 2023 due to domestic political disruption and other factors, whilst pan African basket of currencies has fallen against the dollar by 8 percent on average in 2023. Against this backdrop of volatility in currency markets, hard currency and dollar strategies in the region have also come up against hard currency shortages in markets due to dollar outflows and central banks holding foreign currency reserves. Companies seeking to stabilise currency fluctuations in FX markets might look to hedging currency pairs, especially dollar to local currency exposures to avoid spot rate spikes. Yet hedging is not without risk, and treasurers traditionally tread carefully as losses can accumulate if currency prices fall below derivative values. In parallel, for all the technological advances in the global payments ecosystem, from real time to crypto, and the fact that Africa is a pioneer in mobile payments, cross border payments in Africa are still challenging for treasurers. Cash managers comment that Africa can represent 10 percent of payables and remittances globally, but can take up more than half their time in processing and reconciliation on the cash balance sheet. The latest straight through processing technologies and automated AP/AR systems only work in so far as they are connected, and not met with manual processing bottlenecks. In this session treasurers reflect on the recent market turbulence in foreign exchange, their strategies for navigating fluctuating currency markets, their hedging strategies, and also how technologies such as automated payments and dynamic FX hedging and settlement applications can optimise value. Treasurers also discuss the technologies they use in payment processing, and the fixes required to deliver effective and efficient cross border transactions.

Cash forecasting and cash visibility dominate the treasury agenda in the region with a heightened need to source intelligence and data on cashflows throughout the business to create more accurate short and long term forecasts. A core concern for treasurers in producing forecasts in the region continues to be the difficult issue of moving cash receipts generated in the country across borders and repatriating cash in hard currency – dollars or euros. Central banks which dictate foreign exchange controls and how money can be deposited and moved, are beyond the influence of the treasury. Yet multinational corporations can lobby and seek to influence policy in these matters where the cost of doing business can become challenging. Solutions to trapped cash involve the investment in business operations and local assets such as investing in local currency bonds or real assets.  In country business operations in the region generating cash pools in local accounts that cannot be repatriated due to limitations on foreign exchange controls for offshore entities, is often described as ‘trapped cash’, but for some treasurers, the term ‘local cash’ is a way of describing local currency to support local business operations. Intercompany netting, where receipts from subsidiaries are offset against payments in intercompany trading is a strategy for ensuring the availability of local working capital, whilst intercompany lending can reduce the requirement for local currency funding. In this session treasurers discuss the cash management and forecasting strategies, and key challenges in supporting the working capital requirements of group entities and subsidiaries in regional markets. We also take a look at treasurer’s ‘trapped cash’ strategies, in both short and long term investment horizons.

Risks in treasury are ever changing and the pace of change is ever increasing. Recent events have caused heightened liquidity risks in the region, most recently the Russia Ukraine war and the sanctions that have applied in markets by the West. The closing of markets in the pandemic period, to the supply crisis that followed, the restructuring of business, the rise in the cost of capital, the spiking of inflation and soaring commodity prices have all set the risk dials spinning in the treasury. Yet strategies to mitigate spot price hikes, including hedging with forward contracts, are expensive and commit capital and cash over long periods, in an environment where liquidity and working capital also are a priority focus for the treasury. In this session we ask treasurers how they have recalibrated their approaches to risk through the recent period in several aspects of treasury operations, from cash management and collection, to maintaining working capital ratios, to hedging and financing strategies to mitigate the tide of risks, and the technologies that help treasurers see and act on risk more effectively now and in the future.  

Aligning operations for efficient cash management is the central plank in optimal organisational design in treasury. What optimal organisational alignment entails in practice, varies from company to company, and largely focuses on the balance between central and local cash operations. Streamlining treasury in the ‘one treasury many countries’ model, can be complex where cash is generated in several business units and in several currencies. Yet the cash management process is multifaceted, with many moving parts: including structuring banking operations to efficiently move cash across currencies and borders, whilst enabling local payment options, optimising collection processes, and utilising technology solutions, such as banking APIs, to create efficient cash conversion cycles. The benefits of cash efficiencies can be measured in improved liquidity and enhanced working capital flows, across business operations. In this session we hear how treasurers are achieving ever greater efficiencies in the central management of local cash operations and the new solutions that bank partners bring to the treasury process.   

Centralisation of treasury operations has been a core project for many treasurers in the region focussed on delivering efficiencies in key functions in cash and liquidity management, enabled by cloud technologies and integrated bank portals, central treasury tools are now accessible from anywhere. Yet other treasurers take the view that localised treasury operations, especially in supporting local  business entities, as well as local suppliers and bank relationships, is an important service to provide in the region. For some businesses, the option to centralise services is challenged by devolved business structures and extensive in country operations. Integral to the strategic model for optimising operational efficiencies and centralisation of services is the question of the role of shared service centres in treasury operations. The answers as to what functions should be devolved to shared services, whether these functions need to be fully or in part outsourced, where the operation should reside, either on or off shore, and how the shared services should be managed and report to the central treasury is all part of the strategic operational complexity. Local boots on the ground in regional treasury to support local business operations especially in cash and foreign exchange is a model that some companies still adhere to despite the drive towards centralisation. Remote and hybrid working practices has also created a treasury everywhere model, where location of treasury talent is dispersed throughout the region, although for tax and visa purposes, regional treasury hubs located in Dubai, London, Lagos or South Africa are common operational centres for multinationals. Local treasury talent, with the required skills and experience for treasury positions in these hubs is in demand, especially with the mix of technical and financial expertise modern treasury demands. Some companies have maintained regional centres to retain local talent to support treasury and business operations. In this session treasurers discuss the optimal ways to support the needs of the business at local level, and ask if the drive to centralisation is a net positive solution, and  discuss the role of local and regional treasury teams in supporting business activities.

Treasurers with local business operations in the region rely on the support of international banking partners to provide treasury services in markets, and also local banks for local currency operations, including payments services to local entities and subsidiaries. The integration of local banking partners into a company’s bank panel for local business operations requires active account management and bank relationship management that can be time consuming where additional manual processes are required in the execution of transfers, transactions and remittances and payments in local currencies. Local treasury operations also often face challenges working with local banking partners where there is no integrated or automated solution or compatible connectivity to connect the bank to existing treasury systems. In this session treasurers discuss the challenges in working with local banking partners to support treasury operations and the solutions that they have found in enabling local banks to connect and integrate with their treasury processes.

Building the business case for treasury transformation is increasingly complex in a market full of technology solutions. In the centre of modern treasury technologies, sits the ERP, now with a host of treasury modules, able to connect bespoke or ready made software applications using APIs, and instantly upgradable with the latest tools in payment processing or cash forecasting. Data too feeds ERPs to produce more precise financial reporting across treasury, and data analytics and the skills needed to optimise data systems are in great demand in treasury today. In this session, treasurers talk about the promise of AI, the rise of APIs and connected ERPs, and the future of the TMS systems, sharing their stories of technological transformation, in a regional context. We also look at fintech activity in the region, especially in payments, mobile money and digital wallets. With a young demographic, digital adoption of services is high. Yet where the region has been pioneering in consumer technologies, business to business and financial digital infrastructure, especially in banking and treasury services, has been less developed and is playing catch up with other regions. In this session, we look at the breadth of financial technologies, including crypto, digital wallets, tokenisation, blockchain applications and their applications and use cases in B2B transactions and treasury services. We also take in the development of central bank digital currencies and the challenge to decentralised finance in the region.

Delegate group discussions on sharing experiences and challenges of treasury operations in specific regions. Choose from:

• North Africa – Sally Zikri, Chief financial officer, Decathlon Egypt

• East Africa – Razia Khan, Head of research and chief economist, Africa and Middle East, Standard Chartered

• South Africa – Jyoti Jiwani, Treasury transformation consultant

• West Africa 1 – Chigbo Enenmo, Treasury manager, Nigeria LNG Limited
West Africa 2 – Noor Shafina Abdul Hamed, Manager banking management, EUR-GDC-banking, IATA

• Middle East – Steve Buonvino, Managing director, treasury and trade solutions, Middle East and Africa large corporate sales head, Citi