Africa (Commonwealth) _ United Bank for Africa, one of Nigeria’s Tier One lenders, has inked a $6 billion Memorandum of Understanding with the African Continental Free Trade Area secretariat to support Small and Medium Enterprises to assist them capitalize on the AfCFTA’s potential.
Babatunde Ajayi, UBA’s Head of SME Banking, revealed this during the Nigerian Canadian Business Association Business 2023 Roundtable in Lagos.
The second roundtable of its sort was titled “Enabling Growth by Unlocking Access to Capital, Technology, and Markets.” During a panel discussion, Ajayi voiced concern that intra-African commerce remained below 20%, while other continents continued to produce higher figures.
He went on to say that because of Nigeria’s high production costs, the prices of goods produced by Nigerian SMEs were not competitive with the pricing of products imported from other nations.
The NCBA Chairperson, Ebi Obaro, stated in her welcoming address that the three pillars of access to money, technology, and markets provide critical direction for SMEs navigating the complexities of the global economy.
She stated that technology is radically altering the future of business and has enormous promise for small and medium-sized businesses. Our purpose is to investigate the various ways in which technology may be used to increase efficiency and productivity in businesses in both Nigeria and Canada.
The UBA-AfCFTA Agreement aims to reduce trade obstacles and increase intra-African commerce. The agreement’s goal is to promote intra-African commerce and small and medium-sized companies (SMEs).
According to UBA, the following industries would benefit from unprecedented all-around assistance and trade facilitation: pharmaceuticals, automobiles, transportation and logistics, agriculture and agro-processing.
The finance arrangement will also help other African enterprises who want to do business in other African nations by offering financing, clearing, settlement, and risk management services. This will aid in increasing cross-border commerce, diversifying exports, and promoting economic growth.
AfCFTA is a historic trade agreement that aspires to create an African single market for products and services in order to stimulate economic growth and development throughout the continent. It was formally launched in January 2018, and 54 of the 55 African Union member states have approved it.
The deal, according to the AfCFTA secretariat, would assist to create employment and eliminate poverty on the continent. It will also help to execute the AfCFTA agreement, which aims to create a single market for products and services, free movement of people and investment, and an African currency.
The agreement reached between UBA and AfCFTA is expected to contribute greatly to the achievement of the trade agreement’s goals. UBA’s assistance will help enterprises to expand their operations and enter new African markets by removing trade barriers and enabling trade finance. This will help not just individual enterprises, but also economic integration and prosperity throughout the continent.
The six-billion-dollar deal underscores UBA’s commitment to African economic growth and its role as the continent’s largest financial institution. With a strong presence and experience in Africa, UBA is ideally positioned to help AfCFTA succeed and generate economic progress in the area.
UBA is the largest pan-African banking corporation, which operates in 20 African nations and has a presence in New York, London, and Paris, is well positioned to provide the required finance and support to African enterprises wishing to trade across borders. The bank has a long history of supporting economic development projects, and this deal is likely to reinforce the bank’s commitment to Africa’s growth and development agenda.
Finally, the UBA-AfCFTA agreement is an important step in realizing the African Union’s vision of a prosperous and integrated Africa. By collaborating to remove trade obstacles, UBA and AfCFTA are opening the path for stronger trade and economic cooperation within Africa, which will benefit businesses and individuals throughout the continent.
