Why Africa’s Approach to Financial Risk Management Needs to Change
By Reggie Mlangeni, Head of Sales and Structuring at Absa Corporate and Investment Banking
When detached from the intricate realities of Africa’s economic environment, financial risk management strategies that may prove successful elsewhere often falter.
For nations grappling with rising levels of sovereign debt, unpredictable regulatory uncertainties, and the far-reaching repercussions of political transitions, traditional frameworks, often borrowed from more stable economies, fail to account for the volatility and complexity inherent in many African markets – necessitating a re-evaluation of how financial risks are quantified and managed on the continent.
Recent developments in several countries have been particularly illustrative of this.
In Ghana, faced with substantial revenue co...