Across nearly two decades originating, executing and advising on FX, rates, and commodities for global multinationals and large corporates across Africa, the UK, and EMEA, one pattern appeared more consistently than any other. It was not the volatility itself that caused the damage. It was the calm before it.

The Calm That Was Not a Signal to Wait

It was 2016-17. I was covering a large multinational with operations across Africa. They had dollar-denominated supplier payments due in Q3, a foreign loan repayment due in Q4, and a dividend repatriation obligation to their parent before year-end. Three separate obligations, three separate teams managing them, and at the time I raised each one, the same response: the market looks stable. We will get to it.

The Fed had been signalling its tightening cycle. Oil prices had been sliding since mid-2014. The naira had been under a managed float pressure that most experienced practitioners knew was unsustainable. None of that was hidden. The signals were in every market update, every treasury call and group meeting, every conversation I was having across the floor.

But stable-looking markets create a specific kind of institutional paralysis. When the rate is not moving against you today, the urgency to act feels low. ISDA documentation and Master Agreements that have not been finalised sit in a legal queue. Group treasury conversations that need to happen before a hedge can be approved get deferred to next quarter. The question: What if the window closes before we are ready? does not get asked. Not because the treasury team is not capable, but because calm markets make preparation feel premature rather than essential.

The window did not announce itself when it closed.

By the time the naira came under acute pressure in late 2016, the FX liquidity that had made those three obligations look manageable had tightened significantly. The supplier payment was executed, but at a rate 18% worse than the budget rate. The loan repayment was met, but the local currency cost had risen materially. The dividend repatriation was delayed by two quarters due to FX illiquidity.

None of that happened because the treasury team lacked knowledge. They understood FX risk. They knew the instruments available to them. What they lacked, and what I have sometimes seen missing, was a mental model that connected the stability of today’s market to the urgency of tomorrow’s obligation.

How G7 Moves Become African Balance Sheet Events

The chain that connects a G7 policy decision or geopolitical shock to a multinational’s supplier payment or dividend repatriation in Lagos, Johannesburg, or Nairobi is not abstract. It is mechanical, and it moves faster than most treasury teams are positioned to respond to.

Understanding this chain, not just that it exists, but the precise sequence in which it operates, is the difference between a CFO /treasury team / and a group treasury team that acts in the window and one that discovers the window has closed.

The FX Liquidity Chain

→ G7 policy move or geopolitical shock: The Fed raises rates, or geopolitical tension spikes risk aversion. Global investors reduce exposure to emerging markets. The dollar strengthens.

→ FX liquidity tightens in African markets: Dollar supply in local interbank markets tightens. The spread between bid and offer widens. The rate at which a corporate can execute an FX transaction moves away from the budget rate, sometimes sharply, sometimes gradually, always faster than expected.

→ Supplier payments become more expensive: Importers paying dollar-denominated suppliers in NGN, ZAR, or KES find that the local currency cost of each dollar has risen. Companies that did not lock in a forward rate are now buying spot at the worst time.

→ Trade obligations tighten: Letters of credit become harder to obtain. Correspondent banking lines tighten. Trade settlements that assumed a certain FX rate in the contract now carry a mark-to-market loss before they settle.

→ Loan repayments cost more: Dollar-denominated debt service rises in local currency terms. Companies that budgeted loan repayments at one exchange rate are now meeting those obligations at a materially different one. Covenant headroom narrows.

→ Dividend repatriation stalls or crystallises at worse rates: Central banks in FX-stressed markets prioritise essential imports over profit repatriation. Windows for dividend conversion close. European, Asian, or other global parent companies receive less than budgeted or wait.

→ Consumer prices rise; sales volumes fall: Companies pass through the higher input costs to consumers. In price-sensitive African consumer markets, demand softens. Group revenue and margin compress simultaneously, at the consolidated level, the impact of a G7 policy move is now visible in the top line.

This is not a hypothetical sequence. It is the chain I watched operate across Nigeria, South Africa, Kenya, and other African markets repeatedly for over a decade. The trigger changed, the Fed in 2013 with the taper tantrum, oil in 2014 to 2016, COVID in 2020, the rate hiking cycle in 2022. The chain was the same every time. It is operating again today. US tariff escalations, dollar strength, and capital flow reversals are moving through the same sequence across the same markets. The window question is the same one it has always been, is your preparation already in place, or is it waiting for the urgency to arrive?

The Stability Window: What Calm Markets Actually Signal

The most important insight from nearly two decades of working with the CFO /treasury team / and a group treasury team across Africa, the Uk and EMEA is this: calm markets are not a signal that risk has reduced. They are a signal that the window to prepare is still open.

Behavioural finance researchers call the cognitive pattern at work here stability bias – the documented human tendency to treat the current state as the default, and to read an absence of immediate pressure as an absence of future risk. It is not a failure of intelligence. It is a feature of how human judgment operates under conditions of low immediate stress. The urgency that drives preparation in a crisis is simply not available in the calm before it. And by the time the urgency arrives, the preparation is too late.

Some organisations had built the governance discipline to act in the window regardless of market conditions. I see it as the most consistent and most costly pattern in corporate FX risk management.

Nigeria (NGN / USD / GBP / EUR): The Cost of Waiting in a Managed Float

Nigeria’s managed float regime between 2015 and 2017 created a specific version of the stability trap. The official rate appeared stable because the Central Bank of Nigeria was defending it. Multinationals with NGN revenues and USD obligations looked at the official rate, saw relative calm, and deferred hedging decisions and documentation completion.

What the official rate masked was the parallel market premium, which was signalling dollar scarcity that the official market was not yet reflecting. Companies that read the official rate as the real rate were not reading the market. They were reading the policy. When the CBN allowed a significant naira adjustment in June 2016, the official rate moved from around N197 to over N280 against the dollar within weeks. Companies that had completed their hedging documentation and had approved FX lines in place executed in the window. Companies that had deferred those conversations discovered that the window had moved with the rate.

The governance dimension here is precise: ISDA master agreements, local master agreements, credit support annexes, and board-approved hedging mandates are not instruments. They are the infrastructure that makes instruments available. A company that understands FX risk but has not completed its documentation, hasn’t requested the approved credit lines to be put in place, cannot execute a forward contract when the rate moves. The preparation is the product.

The naira’s managed float did not reduce FX risk. It deferred it and compressed it. Leaders who understood the difference between policy stability and market stability acted in the window. Those who confused the two discovered the difference in their Q3 results.

South Africa (ZAR / USD / GBP/ EUR ): Speed, Liquidity, and the Rand’s False Comfort

South Africa presents the opposite problem. The rand is one of the most liquid emerging market currencies in the world. That liquidity creates a different version of the stability trap, the assumption that because you can always execute, the timing of execution does not matter.

Between 2015 and 2016, and again in 2020, some multinationals with significant South African operations deferred dividend repatriation and supplier payment hedges on the basis that the rand’s liquidity meant they could execute whenever they needed to. The logic was sound. The assumption was not. Liquidity does not protect you from rate moves. It simply means you can execute at a bad rate quickly.

During the rand’s move from R12.50 to over R17.00 against the dollar between mid-2015 and early 2016, companies that had locked in forward rates for their dividend repatriation and supplier payments were protected. Companies that had relied on the rand’s liquidity as a substitute for preparation executed at spot rates that were 25 to 35% worse than their budget rates. The rand was liquid throughout. The rate had moved.

Liquidity is not protection. It is access. The speed at which you can execute in a liquid market is irrelevant if the rate at which you execute has already moved past your budget. Preparation and liquidity are not substitutes for each other.

East Africa (KES / USD / EUR): The Multi-Obligation Compression

Kenya’s experience between 2014 and 2022 illustrates the most operationally complex version of the chain, the moment when supplier payments, trade obligations, and loan repayments all fall due in the same quarter into a tightening FX environment.

Multinationals with Kenyan operations during this period were managing dollar-denominated supplier payments for imported goods, euro-denominated equipment financing obligations, and KES-based revenues simultaneously. When the dollar strengthened against both KES and EUR in the same period, as it did during the 2015 taper tantrum aftermath and again in 2022 as the Fed tightened, all three obligations became more expensive in local currency terms at the same time.

The companies that navigated this best were not the ones that hedged everything. Hedging everything is neither possible nor optimal. They were the ones whose treasury teams had already mapped which obligation would bind first, which payment could be deferred, which could not, which had contractual penalties for delay, and which had FX flexibility built into the supplier agreement. That mapping existed before the quarter arrived. It was not assembled in the week the obligations fell due.

Multiple obligations falling due in the same quarter are not bad luck. It is a scheduling reality that every multinational with African operations lives with, and every indigenous African corporate managing its own FX exposures without a group treasury to lean on faces alone. The question is the same for all of them. Whether the map of those obligations, their sequencing, their flexibility, their FX sensitivity – exists before the pressure arrives or gets built in the middle of it.

UK and EMEA (GBP / EUR / USD): Where the Chain Ends Up

For the parent of an African multinational, whether headquartered in Europe, the UK, Asia, the Americas, or anywhere else in the world, the FX liquidity chain does not arrive as a market event. It arrives as a reporting event, lower-than-budgeted dividend receipts, higher intercompany loan costs, or a subsidiary that cannot repatriate cash when the group needs it. When the Fed moves, the Bank of England signals, or the ECB holds in the same quarter, African interbank markets feel all of it through dollar strength and capital flow reversals, before the parent in London, Singapore, New York, or Frankfurt has updated its quarterly model.

The FX risk that lands on a multinational parent’s consolidated accounts originated in an African interbank market. The governance framework that manages it needs to be designed by people who understand both ends of that chain, not just the end where the reporting happens.

What the Organisations That Navigated This Best Had in Common

Across nearly two decades of working with multinationals, large corporates, and indigenous African businesses on FX and trade risk across Africa, the UK, and EMEA, the organisations that consistently navigated the FX liquidity chain with the least damage shared three things. None of them was about the quality of their market views.

They completed their documentation before they needed it. ISDA master agreements, local master agreements, credit support annexes, board-approved hedging mandates, and approved counterparty lines were in place before the rate moved. This is not sophisticated risk management. It is an operational discipline. But it is the discipline that determines whether a company can execute a hedge on the day the rate moves or spends that day in a legal queue. For indigenous African corporates without a group treasury to guide the process, this discipline is even more critical, because there is no parent company to fall back on when the documentation is incomplete.

They mapped their obligations across the calendar before the calendar became a problem. Supplier payments, loan repayments, dividend repatriation schedules, and trade settlement dates were visible in one place, with their FX sensitivity, their flexibility, and their sequencing understood by a single person or team,  not distributed across three departments that were not talking to each other. For indigenous African corporates managing multiple currency obligations without consolidated group visibility, that single map is not a best practice. It is a survival tool.

They treated group treasury as a partner, not a gatekeeper. For multinationals, this meant subsidiary CFOs building the relationship with group treasury before the pressure arrived,  so that when an urgent hedging approval was needed, the conversation had already happened. For indigenous African corporates without a group treasury, the equivalent relationship is with their banking counterparts –  the Global Markets desk, the trade finance team, and the relationship bank. The principle is the same. Build the relationship before you need it. The approval, or the credit line, or the forward contract should never be the first conversation.

“Risk comes from not knowing what you’re doing.” – Warren Buffett

What the Markets Taught Me

Across the years I spent originating, executing, and advising global multinationals and large corporates on FX and trade risk across Africa, the damage I saw most consistently was not caused by market volatility. It was caused by the gap between when a company understood its FX exposure and when it had completed the preparation to act on that understanding.

The G7 move that tightens African FX liquidity does not create the risk. It reveals how much of the preparation was still undone when it arrived. The supplier payment that crystallised at an 18% worse rate than the budget was not a market event. It was a preparation event, one where the decision not to act in the stable window turned out to have a very specific cost.

The clients I admired most across nearly two decades were not the ones who predicted markets accurately. They were the ones who understood that calm markets were not an absence of risk. They were an invitation to prepare.

The window is open. Until it is not.

What the markets taught me: When a G7 policy move tightens FX liquidity across African markets, every unprepared supplier payment, loan repayment, dividend repatriation, and trade obligation becomes more expensive simultaneously. The market does not cause that cost. The decision to wait for urgency rather than act in the window does.

A Question for Leaders

Your supplier payments, loan repayments, dividend repatriation schedules, and trade obligations for the next two quarters – is the FX documentation, the board mandate, and the group treasury approval already in place to execute them? Or are those conversations still waiting for the market to give you a reason to have them?

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If the gap between understanding your FX exposure and being prepared to act on it is something you have lived – or are living now  – these editions are written from the inside of that gap.

Lessons from the Markets is a bi-weekly reflection on financial risk, leadership judgment, and decision-making under uncertainty, drawn from nearly two decades of originating, executing, and advising FX, rates, and select commodities solutions for global multinationals and large corporates with Africa-linked FX and interest rate exposures across operations spanning Africa, the UK, and wider EMEA.

Each edition builds on the last – refining frameworks, strengthening judgment, and extracting practical lessons that help leaders navigate cross-border complexity, optimise risk, and turn volatility into strategic advantage.

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The stories and scenarios in this newsletter are composite reflections drawn from multiple real market experiences across nearly two decades. They do not refer to any specific client, transaction, or institution.

Inetina Ebitonmor

Global Markets & Financial Risk Leader | 15+ Years in FX, Rates & Derivatives

Helping global multinationals and large corporates protect margins and preserve capital across African FX and rates cycles – through disciplined risk interpretation and decision-making under uncertainty.

Author, Lessons from the Markets