European corporates are pushing into Africa driven by subdued domestic growth in their home markets and stability and forecast economic growth in Africa. Payments innovation is also spurring growth.
“Historically corporates were concerned about volatility when going into African markets, but we are seeing a lot more stability in a number of our markets that has encouraged foreign direct investment (FDI) and expansion via acquisition and capex. Companies are more comfortable that they can get their profits and cash out, and we are seeing green field operations go into African markets,” said Alistair Lindsay Head International Coverage – UK & Europe, Absa in conversation with Treasury Today Group.
Lindsay believes the evolution of mobile payments in African markets is a key catalyst spurring corporate expansion. Digital payments now give companies the ability to manage payroll to low wage employees, getting wages to employees quickly who no longer need to queue to cash cheques, for example. Digital payments also provide new channels for corporates to shore up their supply chain. An African company in the supply chain is now able to scan a QR code or use an API solution to collect the reward from the larger corporate buyer.
Looking to the future, he sees digitisation including mobile wallets and stablecoins transforming remittances from the diaspora too by reducing costs, speeding up execution and ultimately boosting GDP in African markets.
“Remittances are a huge source of GDP to many of these markets and we expect big changes with stablecoins coming in. It will speed up transmission time so something that took three days is now instantaneous because the FX and clearing processes that used to slow down remittances have been taken out,” he says, continuing: “It’s a big issue around financial inclusion. Few people have a bank account, so mobile wallets and mobile payments in Africa are a great way to become financially active and included.”
The impact of digitisation in other areas is also boosting trade flows. For example, blockchain solutions are reducing the cost of cross-border payments and shipping data is also being stored on the blockchain, said Lindsay who oversees a team of 15 supporting European domiciled corporate clients’ African business. The solutions the team offer span transaction banking to trade and supply chain finance and M&A, all delivered in one of Absa’s 12 African markets. “We offer everything you imagine a company needs when it’s growing,” he says.
Getting treasury ready
Getting treasury ready for a push into Africa requires a few key components, continues Lindsay. On one hand, treasurers need to engage with banks, legal and tax teams. Companies also need to engage with the Central Bank and government ministries to ensure they have the right approvals and licences in place.
For example, the remittance of profits is a typical area that can trip corporates that don’t have the right approvals and licences in place. It requires engaging with the high commission, embassy and local government, he says. Corporates require the right licences, permits and approvals from regulators, continues Lindsay. “It’s critical that companies are clear about their plans. All the countries we talk to, prefer a corporate looking for the long term in a way that will grow and augment the local economy.”
Treasury should also have a clear funding strategy and supply chain finance options in place so that the business can thrive once it starts growing. This involves ascertaining if they should fund that entity in market or offshore and in what currency, to ensure they don’t introduce wrong way risk. “FX can be volatile in these markets and corporates should ensure they don’t get the wrong side; companies have done this in the past, and it can cause considerable pain,” he said.
According to Absa’s Africa Financial Markets Index 2025, some countries have made real progress improving transparency in foreign exchange markets and adopting netting legislation. For example, Rwanda, Botswana and Lesotho all recorded impressive score increases in 2025 due to the adoption of netting legislation and new enforceability of collateral provisions.
In other signs of change, although Absa’s research finds many economies have faced a decline in reserves adequacy this year, countries like Nigeria and Uganda have rolled out comprehensive reforms to improve market credibility and interbank liquidity. For example, the Central Bank of Nigeria announced changes targeting the fragmentation of FX windows, a big investor backlog and market operations and the Bank of Uganda focused on liberalising the FX market, improving interbank liquidity and increasing reporting standards, helping attract domestic and foreign investment, lowering transaction costs and boosting cross-border trade.
“Onshore financing is more efficient over time,” continues Lindsay. “Companies need to ensure their working capital needs and access to local funding as they grow. Finance teams won’t necessarily want to push equity into entities from the top down, but as a bank, we won’t want to fund solely with debt, so there is lots to consider for treasurers in the region,” he says.
Treasury will need to decide whether to fund the business from head office offshore and then push the funding down into the business. Lindsay says this tends to work well at a start-up level, and can evolve as the business grows.
Other considerations include sizing the team on the ground. That might be someone just taking responsibility for execution if most of the treasury function remains provided by a regional treasury centre or head office. Yet Lindsay notices some corporates are also placing treasury professionals in the market. This often includes setting up a treasury hub in one of the larger markets like Kenya or South Africa, or an offshore centre in Mauritius to blend treasury expertise and Africa knowledge.
