Hearing the Lion Roar Again: A corporate treasury view of COVID-19 in Sub-Saharan Africa

Alouis Ngoshi

Alouis Ngoshi,
Group Treasurer,
The Weir Group plc

Andre Gouws

André Gouws,
Regional Account Manager,
Sub-Saharan Africa,

Esther Chibesa

Esther Chibesa,
Sub-Saharan Africa,
Treasury and Trade Solutions,

Geoffrey Gursel

Geoffrey Gursel,
Treasury and Trade Solutions Zambia,
and Sales Head for Sub-Saharan Africa,

Lundy Killassy

Lundy Killassy,
Treasury Manager,
Southern and East Africa,

Yvonne Chirima

Yvonne Chirima,
Regional Treasury,
Cummins Africa Middle East

Every second, Sub-Saharan Africa averages 106 new internet users1. With this enormous consumer transformation, and while the medium and long-term effects of COVOD-19 remain unclear, treasurers are looking ahead, recognising that the untapped potential remains as attractive as ever. Citi talks to regional treasurers from Cummins, Ericsson and The Weir Group about the impacts of COVID-19 in Sub-Saharan Africa.

Many Sub-Saharan Africa (SSA) countries are no stranger to specific crises, whether the HIV and AIDS epidemic of the mid-1990s, the droughts in east Africa in 2011-2, or the Ebola outbreak of 2014-16. In each case, the characteristics of the crisis were different, but SSA nations proved resilient. Before the COVID-19 pandemic struck, many countries in SSA were posting modest or strong growth figures.

Given the proactive steps that many governments in SSA have been taking to reduce the impact of the crisis, we envisage a path to recovery to certainly be specific to each country, but also generate a better and more harmonised perspective to digitisation acceleration and acceptance.

Digitise Everything Yesterday

Digitisation was already a strong theme in many parts of SSA before the crisis and corporations have and will continue to ride the innovation-wave of mobile money roll-outs and wider faster-payment settlement systems. But central Government policy-shifts are also pushing for more digital means to soften the economic impacts. This can be seen through increased mobile wallet allowances, digitising social payments away from cash and significant encouragement for the use of e-tax portals. Policy-makers in many countries had instituted changes to transaction fees to encourage more widespread usage.

“While the experience of each country, industry and company during the COVID-19 pandemic may differ, for many corporations, treasury is the driver of a lot of the survival-techniques needed in an environment like this. Adapting to technology becomes the common-ground, but the speed to adapt has become the differentiator. Treasury best-practice sharing is no longer driven by need, but by scalability.”

Geoffrey Gursel, Head, Treasury and Trade Solutions Zambia, and Sales Head for Sub-Saharan Africa, Citi

“Business models are shifting in many SSA nations in response to the crisis, with a far greater emphasis on e-Commerce and digital flows. With digitisation becoming essential for business continuity during the pandemic, we are already seeing changes in the way that businesses are run.”

Esther Chibesa, Head, Sub-Saharan Africa, Treasury and Trade Solutions, Citi


The trend towards digitisation has critical implications for treasury, whether for internal operations, trade and documentation, payments and collections, or supporting new and emerging digital business models. The way that treasury operates has changed dramatically through remote working, however, the automation of manual processes creates a strategic opportunity to focus more on value-added activities, as the experience of Cummins demonstrates,

“Treasury has quickly adapted to a new way of working, and embraced technology for interaction across teams and to digitise formerly manual processes. At the same time, treasury is now under the senior management spotlight, with a greater emphasis on cash flow forecasting, counterparty, market and operational risk, including cyber-risk, and cash and liquidity management.”

Yvonne C. Chirima, Regional Treasury, Africa, Cummins Africa & Middle East

Based on the experience of the crisis, and expectations around a 'new normal', many treasury functions in SSA have modified their priorities. For example, while objectives such as automation and simplification remain important, the crisis has forced everyone to work differently, and make and act on decisions more quickly. Digitisation and adaptability have become higher priorities, helping to elevate treasurers' role as they tackle the liquidity and risk implications of the crisis.

The New Rolling Cash Forecast

While the importance of forecasting has been highlighted during the crisis, it will remain a priority as companies in all industries seek to understand changing supply and demand dynamics, manage liquidity risk, and model and monitor new cash flow profiles that emerge from digital business models. Many companies undertook cash flow forecasting monthly, for example, and this is now far more regular, with a greater focus on understanding assumptions, drivers and variances. Understanding liquidity risk has also become a more significant activity, such as for Ericsson,

“We produce weekly, as well as longer-term, cash flow forecasts, including stress testing and scenario analysis based on best, worst and mid-case scenarios. Cash flow forecasting involves not just business functions within our own business, but the wider value chain. It is important to factor in the impact of supply chain disruption and shifts or delays in customer demand into this analysis to identify liquidity pinch points.”

Lundy Killassy, Treasury Manager, Southern and East Africa, Ericsson

Promoting Positive Change

It is not only supply chain and liquidity sustainability in which treasurers and CFOs play a major role. As their profile becomes more prominent, they also have the opportunity to promote a wider view of sustainability. Companies across all industries are becoming more proactive in promoting their environmental, social and governance (ESG) agenda; however, during a crisis, when liquidity is constrained and risks may be heightened, there can be a tendency to deprioritise ESG objectives. At a time when social injustice and inequality have come to the fore, and environmental concerns become more pressing, it is essential that companies review and reflect on how they are embracing ESG as part of their strategies, business and engagement models.

“One desirable outcome of the pandemic would be a positive change to labour and supply chain regulations, which will ultimately benefit individuals and communities, as well as boosting resilience and reducing risk. Likewise, we see a greater emphasis amongst corporations on slowing climate change, reducing emissions, and fulfilling social responsibilities. During a crisis, it is tempting to put ESG issues aside, but the negative effects of this approach are already clear.”

Alouis Ngoshi, Group Treasurer, The Weir Group plc

Redefining Risk Management

The value of risk management, whether credit or financial risk, has been emphasised more strongly than ever during the crisis. Many treasurers have used this as an opportunity to review and potentially revise their risk management policies to reflect the unique situation in many parts of SSA and new priorities, as well as their overall group strategy.

Increasingly, treasurers in SSA are working with other business functions to manage risk not only within the company itself, but across the entire enterprise. Many companies are working with banks and suppliers to hedge their supply chain risks, such as through supply chain financing. This enables them to build resilience into supply chains, support supply chain partners more effectively, and reduce the impact currency revaluation.

No organisation can drive meaningful change, whether socially, environmentally and economically, in isolation. Rather, they need to work across ecosystems and with their financial partners to overcome short term challenges and build the business models that will drive growth and boost ESG objectives in the future.

The E-Commerce Lesson for the Future

There is often talk of 'winners' and 'losers' in a crisis, but many industries have proved remarkably adaptable. While some traditional business models will be superseded, there is also the potential for companies across a range of industries to reinvent themselves – including a full re-vamp of their sales strategy.

This thinking and reshaping of traditional business models could help build future resilience and drive new ways of thinking that are more suited to the unique situation of each SSA nation. For example, given the pressure on infrastructure in many parts of SSA, the shift in working and consumption patterns presented by the crisis could prove an opportunity to leapfrog traditional development trajectories. Online food delivery in particular cannot go back to the slow progress it saw across the continent.

Treasury can play a significant role in enabling these evolving business models through access to liquidity, payment and collection methods, risk management and cash flow forecasting to understand and test future cash flow dynamics. Likewise, as a bank, we are working with clients to explore their digitisation plans, evolving business models and future ambitions to meet the challenges that they face today, and help them to flourish as a new, more digital Sub-Saharan Africa emerges from the crisis.

Download PDF