The Pre-Funding Trap: the silent tax on African cross-border payments
Why the cost of moving money across African corridors is a capital-structure problem, and how to quantify it.
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Ask most operators what their cross-border payments cost, and they will point at the FX spread and transaction fee. Those are the visible numbers. The expensive number is the capital sitting pre-funded in local accounts across markets, earning nothing and exposed to currency risk just to settle quickly.
Multiply those balances across corridors and you carry a standing book of idle, currency-exposed capital. The discipline is to measure the cost of carry, the FX risk and the opportunity cost alongside visible transaction fees.