MTN’s treasurer: ‘Banks do not have the penetration of the telcos’
In an interview with Euromoney, MTN Nigeria’s general manager, corporate treasury, talks about managing the business, banking relationships and how he hopes regulation blocking telecoms firms from offering mobile payments in Nigeria will change.
Ishmael Nwokocha is general manager of MTN Nigeria’s corporate treasury, responsible for banking services, treasury operations, corporate finance, and financial and operational risk management for the company. In a quick-fire interview with Euromoney, he answers our questions on the strategic importance of treasury, managing the operation, the single most challenging piece of regulation his company is facing, and the role and service provided by the company’s relationship banks.
How strategically important is the treasury function to the growth and development of your company?
It is very important, especially with the transition of the treasury function from a cost centre to a value-add centre. This involves the end-to-end review of business-wide activity and exposure, and the deployment of cutting-edge financial skills to optimize value for the business and reduce financial exposure.
What is the single most important decision you have taken as treasurer that has had a material impact on the financial performance of your company?
The business raised $3 billion in 2013. We made a decision to arrange the deal internally, despite the deal being our largest and across four continents. The reason behind arranging it internally was partly a result of the need to optimize cost and our enhanced expertise over time. This saved the business about $60 million in fees that would otherwise have been paid to external arrangers.
How do you manage the treasury operations? Who is involved, where and what technology do you employ to enable you to manage this operation?
The team is structured into corporate finance, banking and treasury, treasury operations, credit management and the insurance functions. Each of these functions has a manager who reports to me. The team is centrally managed, providing support for the entire business across the regions.
We have deployed a multi-bank transaction interphase for payment settlement, cash forecasting and cash management, and have integrated it with our ERP for the straight-through processing of transaction. We have also deployed a multi-bank trading platform for deal negotiation and confirmation.
What is the single most challenging piece of regulation, financial or otherwise, that your company is facing, and why?
The mobile money regulation is limiting to the telcos. It is currently being restricted to a bank-led product. This has limited the intake of mobile money as the banks do not have the penetration of the telcos. It is hoped that a more inclusive model between the banks and the telcos will be adopted in future.
What role or roles do your relationship banks play in helping you manage the treasury operation? Are the fees you pay them for this worth it?
The banking-relationship team has evolved along with us. They have become more competitive and proactive in product offerings. This has helped us to achieve our objectives and deepen the level of engagement with the financial market makers.
Are your relationship banks providing you with better or worse advice and solutions in treasury management than ever before?
The relationship banks have an understanding of the telco environment and the related treasury management. We will continue to organize workshops where we will keep them abreast of the telco environment and where we will like to be.
Our banking relationship is governed by a robust service-level agreement and appraisal process that is not biased but rather rewards the banking partner who is able to understand our business, stakeholders, and provide an array of efficient and supportive financial services to MTN Nigeria.