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Keeping up with Africa in 2014

From Adapting to Change to Seizing the Opportunity: How Corporate Cash and Treasury Management is Changing in Africa

by Geoffrey Gursel, Vice President, Africa Sales, Treasury and Trade Solutions, Citi

Not even 15 years ago, multinational corporations looking to enter Africa trod cautiously, fearful of the known corruption and fraud in traditionally cash-based markets and the difficulty of working in a region whose banking and infrastructure was not nearly as sophisticated as the West’s. But as significant urbanisation, electronification and innovative leap-frogging continue, the requirements, strategies and expectations of regional corporate cash and treasury management are forced to evolve as well.

By now the opportunities in Africa that corporations like to see have been heavily reported — from significant economic and GDP growth to mobile money exploding across the continent to substantial regulatory reforms. Indeed more financial institutions are welcoming the opportunity to introduce corporations to the ‘new Africa’ and the related, but varied, banking and economic transformation of its core markets. A recent survey conducted by The Economist Group of 217 global companies based in 45 countries reveals that expansion in Africa is a priority for two-thirds of such organisations within the next decade.

Today, half of the African population is under 20 years of age, and these people are rapidly moving to cities. In fact, more than 40% of the population is now living in urban areas. As corporations look to concentrate their expansion strategies into and across Africa, the evolving urban populations in geographically strategic cities are clearly tactical areas of growth. However, as the focus and concentration shifts towards the key cities of Cairo, Kinshasa, Lagos and Nairobi, increasing guidance, direction and trust is sought to understand how to maximise these economic and financial trends and what advice can be provided from the banking and financial sectors.