Citi Perspectives Fall 2019

Citi Perspectives  | 17 16 | Treasury and Trade Solutions Howe agrees, adding that, “It’s only when you get on the ground in Africa that you realize what sort of challenges exist. However, SWIFT gpi is an interesting development and hopefully treasurers supporting Africa will see the benefits soon.” Realistically, though, Ngoshi believes that not all treasurers will be able to take advantage of SWIFT gpi. Moreover, he suspects treasurers will look to tackle their cash and liquidity challenges not necessarily through innovation, but through bank rationalization. He asks: “We all know that you need to have as few banks as possible — but the challenge is how to do it in practice? How do you get the other banks to sweep? Can they accept the instructions and act on them?” Resolving issues around communication channels is essential, Ngoshi believes. Being forced to close the gaps by working with more local banks means not having the service levels, or customer clout, that a treasurer would have from their international bank, he adds. Ayo-Olaiya agrees, and emphasizes the additional risks associated with widening the pool of banks too far, referencing a multi- banking tool that allows treasurers to sweep funds into a concentration account. “It’s a way to solve the counterparty risk issues of non-core banks,” she comments. Exciting times It is clear that accessibility and visibility over funds, as well as swift mobilization of cash, remain key challenges for treasuries in Africa. But, pain points acknowledged, Gursel is positive about the future as the introduction of real-time insight rolls out and bank/client relationships evolve. “It’s an exciting time to be operating in Africa. The regulatory review and product upgrades that all banks are undertaking right now are not only helping corporate treasurers to be more proactive around the opportunities in Africa, but also changing the way banks and corporates — and let’s not forget fintechs and payment intermediaries — are working together to unlock the continent’s true potential.” This is creating a buzz of excitement among corporates. Ngoshi is happy to see governments across Africa taking an active interest in understanding business requirements, especially around regulation. He believes this will help firms to focus more on “doing better business.” Of course, technology will be a major contributing factor to this bright future “transforming both traditional and nontraditional sectors,” notes Ayo-Olaiya. And as Howe says, “Through technology, Africa is opening up for us, bit by bit — and we are already positioning ourselves for growth across the continent.”