Citi Perspectives Fall 2023: Transforming Treasury

| 25 Setting course: Navigating the opportunities of the Middle East and Africa Creating the right kind of networks Another advantage of working with a bank that has an international footprint is that it can align its relationship coverage model with the clients’ treasury structure. As a corporate expands in the region, a bank like Citi can mirror how the company’s teams are organized, deploying its relationship bankers across similar hubs and locations. In supporting such clients’ needs, Esther Chibesa, Co- Head of Treasury and Trade Solutions (TTS), Middle East and Africa, Citi, comments how the bank plays to its strengths and has also learned to adapt to the needs of the clients. “Citi’s traditional strength is in trade and working capital solutions, and in a dynamic environment like the Middle East and Africa, we have to think innovatively.” Part of embracing the opportunities and doing this, she explains, is by forming a network with other financial institutions. This includes creating, building and selling assets to keep liquidity in the market and allowing clients to mitigate their exposures on various trade flows in the region. such as the changing rules on intra-company lending in West and Central Africa, and what companies need to do to manage this effectively. Working through challenges with a banking partner A common challenge for corporates operating in Africa is trapped liquidity, due to foreign exchange scarcity and monetary policy actions to conserve currency reserves. Also, companies are looking for solutions to optimize returns on their trapped liquidity and solutions to improve working capital. Other challenges include high use of cash in the region, to which corporates are looking for digital alternatives. Enwereji explains that Citi can assist by proffering the most appropriate liquidity management and digital collection solutions. “Balancing access to cash and optimizing returns on liquidity keep treasurers up at night,” says Enwereji. “Technology companies and other digital natives run a lean structure that allow expansion of services into countries without The bank is networked and connected to many parties in the region. Take for example, a multinational corporation where the regional treasurer is sitting in Dubai and is operating a business in South Africa that sells into Senegal. That company may have letters of credit issued by the client’s bank in Senegal, which have been negotiated, confirmed, and supported by a back office in India. “This is all done through a digital platform — this is the power of Citi facilitating international trade,” says Chibesa. When it comes to capital controls, multinationals have particular challenges and they need support in managing this, explains Chibesa. As well as continuing with traditional trade instruments such as letters of credit, Citi’s TTS team has a close relationship with the market’s business to create solutions for clients, such as swaps. Part of Citi’s work in the region involves maintaining close relationships with regulators to understand the implications of the various changing regulations. There is a lot for companies to navigate, Citi’s traditional strength is in trade and working capital solutions, and in a dynamic environment like the Middle East and Africa, we have to think innovatively.