Citi Perspectives 2024 Corporates Edition

| 17 Charting the Path for Digital Transformation: Centralizing treasury operations in Africa approach involves streamlining processes through the use of advanced technology platforms, such as application programming interfaces (APIs) and host-to-host systems. These technologies not only simplify operations but also seek to enhance capabilities for cash forecasting and scenario analysis. Compliance and regulation remain paramount Moreover, compliance remains a critical component, as navigating the regulatory landscapes of diverse markets requires a robust framework to ensure adherence to local and international laws, which can significantly impact operational flexibility. Understanding the intricacies of tax implications and regulatory requirements is crucial in deciding whether to centralize treasury operations. For example, decisions on where to locate treasury functions can hinge on factors such as the quality of banking relationships, the depth of financial markets, and the availability of skilled treasury professionals. In essence, while the strategic drive toward centralization aims to consolidate treasury activities for better oversight and risk management, it also calls for a balanced approach that respects the nuances of local markets, ensuring that centralized policies can be effectively implemented with sufficient flexibility for decentralized execution. This hybrid model appears to be particularly effective in regions like Sub-Saharan Africa, where economic and regulatory diversity requires a more nuanced approach to treasury management. Predictions for future treasury management Looking ahead, Chibesa and Jiwani predicted increasing sophistication in treasury operations across Africa, driven by advancements in technology and financial market infrastructures. Chibesa highlighted the growing interest in API integrations and real-time data analytics, which are set to transform traditional treasury functions into more dynamic and strategic operations. “As more organizations look at strategically transforming their finance functions, African treasury teams could be uniquely positioned to compete with other shared service locations to further expand their scope and bring new opportunities into the region,” Jiwani further said. They also emphasized the importance of nurturing local talent and leveraging regulatory knowledge to enhance treasury management’s effectiveness within the region. The adoption of sustainable finance practices and the integration of environmental, social, and governance (ESG) criteria into treasury operations were identified as critical elements for future development. Originally published by EuroFinance on May 7, 2024 – click here for more Esther Chibesa Sub-Saharan Africa Head of Citi Treasury and Trade Solutions Listen to this article