The Treasury 360 conference, organised by the Association of Corporate Treasurers of Nigeria, was an eye-opening event that brought together some of the brightest minds in finance to address the pressing challenges facing Nigeria’s economy. The event offered a rare glimpse into the critical challenges and strategies shaping Nigeria’s financial landscape.
As a non-treasurer, I attended this event with the hope of broadening my understanding of the financial issues that affect businesses and economies on a macroeconomic scale.
Key Insights from the Event
The conference was abuzz with discussions on two pressing issues: the fluctuating exchange rate and the soaring interest rates, both of which dominate Nigeria’s financial landscape.
Exchange Rate Volatility
One of the most discussed topics at the conference was the fluctuating exchange rate of the Naira. Speakers highlighted the difficulties of navigating an unpredictable exchange rate, which complicates planning and budgeting for organisations relying on imports or foreign investment. For businesses operating in Nigeria, this volatility presents significant challenges, particularly for those engaged in international trade. The uncertainty surrounding the Naira’s value makes it difficult for companies to plan long-term, as they constantly face the risk of currency devaluation.
Despite these challenges, there was optimism about leveraging technology and innovative financial tools to mitigate risks. Hedging strategies, forward contracts, and partnerships with financial institutions were suggested as ways to create a buffer against currency shocks. It was fascinating to see how treasury professionals think several steps ahead, constantly anticipating changes to shield their organisations.
High-Interest Rates
Another dominant topic was Nigeria’s historically high-interest rates, which currently stand among the highest in the world, with rates in some cases soaring to an astonishing 40%. Such figures are staggering, particularly for small and medium-sized enterprises (SMEs), which struggle to access affordable credit.
Speakers painted a vivid picture of how these rates impact entrepreneurship and innovation. For many business owners, high borrowing costs mean shelving expansion plans, cutting operational budgets, or forgoing investment altogether.
What struck me most was how treasurers view interest rates not just as numbers but as a reflection of broader economic policies. The discussions delved into the reasons behind the high rates, such as inflationary pressures, government borrowing needs, and central bank policies aimed at stabilising the Naira. Understanding these interconnected factors was a revelation for me as an outsider, highlighting just how complex and multifaceted these issues are.
Implications Beyond Treasury
For someone like me, with no formal background in treasury, the conference highlighted the interconnectedness of the financial world. Treasury management might seem like a niche field, but its influence extends far beyond the walls of corporate finance departments.
Industries such as agriculture, manufacturing, and technology are all affected by exchange rates and borrowing costs. Even individuals who never engage with treasury directly feel its impact when inflation drives up the cost of living or when local businesses close due to financial pressure. This realisation has deepened my appreciation for the role of treasury in shaping not just corporate strategies but also broader economic outcomes.
Conclusion
Attending Treasury 360 as a non-treasurer offered me a unique perspective. Treasury professionals are, in many ways, the unsung heroes of corporate finance, balancing risks and opportunities to keep their organisations afloat in uncertain times.
What resonated with me most was the collaborative spirit among attendees. Despite the challenging economic environment, there was a palpable sense of determination to innovate and adapt. Conversations during breaks revealed how treasurers are partnering with fintech firms, exploring digital currencies, and even considering blockchain solutions to enhance efficiency and transparency.
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