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Unlocking Africa: Treasury Holds the Key Africa is a continent of vast opportunity. But leveraging the African success story requires genuine insight into the disruptive trends that are helping to shape Africa’s transformation. A recent Citi roundtable highlighted how treasury is evolving on both sides of the continent, and how treasurers can play a role in putting Africa firmly on the corporate map.

Unlocking Africa: Treasury Holds the Key

Unlocking Africa: Treasury Holds the Key 

By Eleanor Hill, Editor

Africa is a continent of vast opportunity. But leveraging the African success story requires genuine insight into the disruptive trends that are helping to shape Africa’s transformation. A recent Citi roundtable highlighted how treasury is evolving on both sides of the continent, and how treasurers can play a role in putting Africa firmly on the corporate map.

Treasurers looking to operate in Africa, and those already on the ground, will always benefit from the experience of those who have gone before them. Insight that comes only from a practical understanding of what it is to trade in different parts of this continent, helps shine a light on just how much of an opportunity awaits those who choose to do business in a modern, progressive Africa.

Centralisation is rapidly evolving

Geoffrey Gursel

Geoffrey Gursel
SSA Head of Corporate & Public Sector Sales & Implementation, TTS, Citi

For European or American corporates operating a treasury hub in Africa, approaches to centralisation are being redefined, as a result of regulatory changes and technological evolution. As Geoffrey Gursel, SSA Head of Corporate & Public Sector Sales & Implementation, TTS, Citi, notes, this requires treasurers to ask more pointed questions as to where people are needed locally. Traditional treasury hub locations such as Johannesburg, Cape Town and Nairobi are no longer the only options.

The ongoing assessment as to where to establish a treasury hub for Africa is still evolving, notes Gursel. “Tax is the obvious core component of a treasury location strategy – and South Africa has always been the gateway to treasury control in Africa. However, due to a variety of macro-and micro-economic factors, South Africa is being challenged as the premier location,” he comments. This realisation has afforded Mauritius’ rise as a potentially tax-efficient location, dependent on each organisation’s unique situation. The country’s government is also courting the fintech community, allowing vendors to leverage the island nation as a tech-hub for the whole continent.

Gursel says that Dubai has also become an established location for treasury centres being a “time-zone-friendly, flight-friendly location to get into Africa”. And one newcomer Gursel notes is Casablanca, with the Moroccan government rethinking its tax regime to compete with Dubai and the Middle Eastern markets. “It’s also becoming an easier place to do business and a landing-pad for new organisations entering the continent.  I suspect we will see more treasurers considering this location in the future.”

Running treasury operations from the Netherlands, Melissa Howe, Banking Specialist,, says that having a local team that is close to an individual market within Africa is still important. At the very least, it aids immediacy of response to regulatory change - and African countries often experience frequent regulatory movements. As such, already has finance operations in Kenya, making Nairobi its natural choice of location, and this ear-to-the-ground is a significant help for group treasury.

Meanwhile, for Alouis Ngoshi, EMEA Regional Treasury Director, Cummins, the model is one of flexibility, largely in response to the challenging regulatory environment of its multi-market presence. Normally, he says, treasury would centralise, given that this helps to improve visibility and responsiveness over cash. “Africa is different. That’s why we set up regional teams, specifically to focus on the regulatory environment.”

Melissa Howe

Melissa Howe
Banking Specialist,

There were some obvious location choices in Africa for Cummins but West Africa presented an interesting alternative. “We have an expert located in West Africa, to focus on that region and help relationships with some of the West African banks,” says Ngoshi. While this local approach has its obvious benefits, “it’s a constant struggle between how we keep everything at the centre but still get that vital local knowledge on the ground,” he explains.

“As such, the ultimate aim is for Cummins’ Africa treasury structure to be similar to what the company has in Europe and US; but it’s not easy. We are excited to learn about new technologies that are opening up different possibilities to solve this challenge.”

Another location that is growing in popularity for treasury hubs is Nigeria. Foluso Ayo-Olaiya, Nigeria Head of Sales, TTS, Citi, believes that the country has some distinct advantages. The “sheer magnitude of Nigeria in terms of population, with thriving commerce and talent, and its free trade and production zones are the driving force for more and more corporates to see the country as the cluster-office for West Africa, even covering East African operations,” she explains.

“In addition to having decision-making clustered in Nigeria, service provision is being aggregated here too,” she notes. For example, “the sophisticated payments system in Nigeria is enabling payments services providers to cover multiple geographies from Nigeria, thereby creating a tech payment gateway to support decision-making and execution hubs within the country.” In addition, there is a great deal of focus by the government on creating a more investment-friendly environment. As that develops, she believes “we will see more treasury hubs in Nigeria.”

Technology is flipping the script

While technology is an enabler of new hub locations, it is also a disruptor that is transforming the treasury landscape in Africa. One of the main areas of technology disruption is e-commerce, says Gursel, which is naturally impacting payments and collections. “Numerous African-based e-commerce platforms have taken off, particularly across Sub-Saharan Africa (SSA). These are feeding new consumer expectations into the corporate treasury world, of faster, more seamless electronic payment methods. Banks are also having to adjust their offerings accordingly, in order to support the new asks.” 

Alouis Ngoshi

Alouis Ngoshi
EMEA Regional Treasury Director, Cummins

Elaborating on this shift, he says that person-to-person flows – using mobile money – started in East Africa but new channels and ways of paying are emerging across the continent. This has seen local clearing systems and domestic payment methods upgraded. Faster payment and faster settlement platforms are being rolled out in SSA, changing the way corporates manage working capital, notes Gursel. “This reduces the reliance on float and changes working capital strategies. Immediate debit and immediate credit is becoming a reality.” 

“We’re watching this trend closely; however, we are not too involved with disruptive payment processes,” says Ngoshi. Cummins sells large machinery and has established large customers, like OEMs, on standard settlement terms. “But on the receipts side, there are some challenging countries, like Ghana for example, where we do see quite a lot of cash from smaller customers and we are considering setting up a mobile collections process.” At the moment, face-to-face delivery of invoices to Cummins’ customers is not unheard-of in certain countries because “the infrastructure is not there” to ensure receipt and thus payment.

In addition, Cummins’ de-centralised cash management approach in locations such as Nigeria means using smaller banks, so the company needs to channel cash quickly to its main relationship bank. Here, Ngoshi says the firm has been exploring ways in which it can help its finance team with reconciliations – perhaps via virtual accounts. also previously struggled with collections and reconciliations, says Howe, but it now uses virtual accounts across Africa, which has significantly eased the pain points. Kenya is another success story for the firm; due to an innovative approach to changing payment methods, the company collects almost 70% of its Kenyan transactions via mobile. Howe believes that it’s the innovative payment methods that really unlock a country – and in many ways hold the key to making a success of operations in Africa. “The more diverse and innovative payment and collection methods are, the more relevant we are in a local market.”


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