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24 February 2024

Economic boom spurs need for more capital management tools

By Mohammed Al Kady



Major economic and financial changes in the Middle East and Africa are creating new business opportunities – and as a result increasingly sophisticated capital management instruments are being developed.

Corporate and financial institutions are facing greater challenges in managing their working capital and supply chains because of tightening liquidity and uncertainties over the global economy, said Standard Chartered Bank officials. “The Middle East and Africa are evolving very rapidly and companies and financial institutions are expanding their operations outside their home territories to work in a regional environment – raising the need for sophisticated working capital management tools,” said Tarek Anwar, the bank’s managing director and global head of sales for transaction banking.

He was speaking at the launch of the second Standard Chartered Guide to Working Capital Management in Asia, Africa and the Middle East. “It is a guide for both regional and international corporate institutions,” he said. “It offers information and knowledge about changes in the regional financial sector and gives regional companies an idea of the best practices in working capital management.

“Also international institutions can obtain information about opportunities in the region, changes in legislation, tax rules and clearing systems.” Anwar told Emirates Business that trade and investment corridors and flows were shifting throughout the region.

“In the past we saw one-way corridors from China to the Middle East and Africa, and from the Middle East to Europe and the US. Currently there are fundamental changes as large Middle Eastern and African companies are expanding their operations outside their territories to reach Asia.

“Also European and US investment is flowing to the region. We see a large number of international financial institutions opening offices in the Dubai International Financial Centre.”

He said oil revenues were not the only reason for the increasing liquidity and flow of investments in the Middle East – especially the GCC countries.

“We see more flow of liquidity due to regional and international investment in the region, and this creates a need for more knowledge of opportunities and capital management instruments.”

He said the guide was not prepared solely by Standard Chartered. “Several other corporate and financial institutions have participated,” he said. “We gathered the views of economists, regulators and legal experts about different financial changes taking place in the region.
Change is not confined to economic and financial matters – it also affects the calibre of people working in the industry. There are new experiences and practices and the guide offers a chance to transfer expertise to other institutions.”