Cash management and foreign exchange in treasury operations in Africa continues to prove a complex challenge for treasurers of both multinational and pan African companies due to economic and regulatory variances across countries, central bank restrictions and currency convertibility issues, leading to ‘trapped cash’, and hindering efficient repatriation of cash receivables. Whilst treasurers work to efficiently manage local cash through intercompany cash pooling and netting structures and operations, cross border cash management is subject to tax and FX regulations which can erode value. Yet treasurers are increasingly leveraging technology solutions to best manage cash positions and gain real-time visibility and control, to enable more efficient movement of cash. Forecasting tools that can help predict receivables flow through the analysis of historical data also enable greater working capital and liquidity planning. In this session treasurers discuss their cash management and forecasting practices and strategies in the region in both local African business context and in the context of the multinational group company, and identify solutions to common cash challenges.

African currencies have seen significant devaluations in 2024, notably the South African Rand (ZAR) dipping 12.5 percent, Nigerian Naira (NGN) dropping 18 percent and Kenyan shilling (KES) losing approximately 8 percent of its value over the past year. Depreciation has been driven by a combination of factors, including the strength of the US dollar, fluctuating oil prices, dwindling foreign reserves, inflationary pressures and supply disruptions due to market volatilities and geopolitical uncertainties. For treasurers, devaluation and increased local currency volatility equates to a heightened level of risk management in FX operations, including where necessary, currency hedging strategies. Fluctuating local currency values and volatile interest rates require vigilance and proactive risk management strategies to protect against foreign exchange losses. Treasurers must also navigate complex regulatory frameworks, which often include strict capital controls and reporting requirements, adding another layer of complexity. In payments, whilst the pan-African payments and settlement system (PAPPS) has created a cross border platform supported by several central banks in Africa, it is not universal and challenges remain for treasurers in transaction costs and delayed payments due to a lack of standardisation and inefficient systems and clearing mechanisms across borders. In this session we explore the current challenges in FX, local currency management and payments, with emphasis on the tools and technologies that assist in derisking transactions through intelligent automation.

In a region of fragmented financial infrastructure, varying regulatory environments, and uneven technological capacities across different countries, the drive to create integrated and interoperable treasury and banking systems is challenging for treasurers. Creating standardised APIs for seamless communication between multiple financial institutions and treasury solutions can be hindered by a lack of interoperability. Often the treasury digitisation project is disrupted by regulatory compliance requirements, such as wet signatures and physical documentation. Yet the acceleration of automated and AI enabled technologies, offers opportunities to overcome some of these challenges. AI-powered analytics can enhance cash flow forecasting, risk management, fx transactions, and fraud controls and compliance. Algorithms can be fine tuned to local currency markets, enabling accurate predictions and actions in fx management. As AI evolves, it has the potential to streamline treasury operations in the region, speed up local compliance processes, enabling treasurers to focus strategically on cash and liquidity operations. In this session treasurers discuss their challenges in digitalising treasury operations and their early applications of AI in treasury in the region

Delegate group discussions on sharing experiences and challenges of treasury management in specific operations and functions

1. FX
2. Payments
3. Cash Management
4. Cash Investments
5. Bank relationships
6. Financing and liquidity
7. Operations
8. Technology & AI

Roundtable groups continue over lunch

Treasurers of multinational companies with operations in Africa periodically review organisational optimisation in terms of the balance of centralised and localised treasury operations. Whilst centralised treasury models can offer economies of scale, standardised processes, and greater visibility in cash and risk management, in-country treasury operations to support local business entities might be required to manage regulations, fx and currency fluctuations and local banking relationships. Yet the balance of central and local treasury activity is increasingly possible with technology, as cloud based treasury management systems enable data reporting from local entities, offering real-time visibility into cash positions, automating FX hedging, and optimising payments and collections across multiple currencies and countries. Central in-house banking also offers payments on behalf of group entities and subsidiaries as well as netting and cash pooling capabilities. In this session treasurers discuss the technological solutions to local treasury operations reporting into a centralised treasury structure and the challenges in balancing both local and central treasury functions and teams across multiple currencies and countries.

With central bank rates running at 27 percent in Nigeria and 11 percent in South Africa, treasurers are managing liquidity strategies to avoid borrowing in local currencies to finance local operations. Accessing capital in local bank markets can be limited, while loan markets can offer restricted tenors and higher interest rates. Shallow capital markets for corporate issuers, volatile currencies, and regulatory complexities combine to make capital raising in local markets both challenging and suboptimal. Managing cash across diverse markets with varying payment cycles and credit terms is also a key challenge for corporate treasures aiming to create stable working capital flows. Treasures have developed several strategies to navigate these liquidity challenges, including offshore capital raising, and SCF and trade finance solutions in payables and receivables financing to generate liquidity and optimise working capital in challenging African markets.In this session treasurers discuss current challenges in liquidity management and the financing strategies and solutions to enable efficient in country operations.

Borrowing at elevated rates in international loan markets is difficult to avoid for companies who are refinancing revolvers, even for investment grade companies that can borrow at the best rates, alternatives, including private placements, might only partially meet funding requirements. For non investment grade companies, and regional companies that need to borrow at local rates the short term outlook is stark. In this session, treasurers discuss revolvers and alternatives and strategies to dodge the rate bullet. For A rated companies who can tap international capital markets, we also assess the short term bond markets and likely performance in 2024-25. With many global companies now setting ESG and net zero goals, with footprints and operations in Africa and the Middle East, treasury has adopted a key role in the drive to sustainability. From investing in ESG funds, to raising sustainable finance either in green bonds or sustainability linked loans, to ensuring that suppliers meet ESG KPIs, treasury and FP&A, procurement and investment colleagues are working together to meet company net zero goals. In this session treasurers discuss their ESG strategies in the regions and share their experiences of issuing and borrowing in green loan and bond markets, and investing in ESG funds. Treasurers also reflect on the embedding of ESG KPIs and the contribution the treasury can make in making a difference. We also take in the development of investment markets, where African money market funds are delivering higher yields due to soaring rates with South African deposits currently at 7.5 percent. Strategies for placing cash on deposit in money market funds as a pool of capital offering intraday liquidity, are increasingly utilised as an alternative to bank deposits.

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

1. West Africa
2. East Africa
3. Southern Africa
4. Central Africa
5. North Africa
6. Middle East