Speaking in Dar es Salaam yesterday at a one-day seminar workshop to its clients, the Strategic Markets Origination Africa for BAGL, Mr Mohamed said that flexible policies by corporate entities can help them in the identification and evaluation of risks.
“Policy ensures all financial risks are recognized and treated in line with the board’s management theory.
A good policy must be flexible based on market conditions,” he said.
A policy, he said, should have discipline in terms of equipment and tenor.
To achieve all this, corporate entities’ policy has to be reviewed and updated according to arising changes to the market, said Sayed.
According to him, policies could help firms survive currency risks, Foreign exchange risks, inflation risks, interest rate risks and commodity price risks that hedging then company’s strategies.
“A majority of entities across Africa do not hedge foreign exchange risks and one of the core reason cited is operational cost management. The solution is to introduce certainty into a rate and to reduce the variability of gross product margins,” said Sayed.
The head of global markets for corporate and investment banking at Barclays Bank Tanzania Ltd, Ms Esther Maruma said that the one-day seminar had focused on knowledge transferring to its corporate customers from all sectors that would help them manage risks.
At least 70 chief executive officer and senior officials from corporate entities that are Barclays Bank customers attended the seminar and hoping that they would accumulate knowledge that will help in risk management.
“For instance, risk management has become to most of the pension funds in the country. Investor injecting Tanzanian shilling in pension funds especially for big bonds have dwindled from 14 percent three years ago to one percent at present.
The issue of risks that occurs hold back local investors to inject their money due to fluctuations in commodity price, exchange rates and interest rates,” said Maruma.