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UBA, AGF sign MoU facilitating $100m loans to SMEs across Africa

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The African Guarantee Fund (AGF) and the United Bank for Africa (UBA) on Monday signed a partnership that ensures that UBA provides $100 million in new loans to Small and Medium Enterprises (SME) and business owners across the 20 African countries where the bank has presence in Africa.

The AGF under this agreement will support and guarantee SMEs with $50 million Portfolio Guarantee as well as facilitate extensive capacity development for the Bank’s teeming customers who run small businesses across the continent, paying special attention to women-led businesses and green finance projects.

UBA’s Group Managing Director, Oliver Alawuba, who spoke during the partnership signing ceremony between both institutions at the UBA Head Office in Lagos, on Monday, said that as Africa’s Global Bank, UBA remains committed towards supporting SMEs in Africa, especially to women founded and managed businesses,  given its robust network, which is spread across the 20 countries in Africa and major global financial capitals.

He said, “This guarantee will serve as a catalyst for the bank’s intervention for SME business, women-led and environment friendly businesses, enabling us to further extend our reach and impact. Additionally, the extensive capacity development initiatives planned for our SME customers across 20 African countries align with our vision to empower businesses, drive innovation, and foster sustainable growth.

“I am particularly excited about our focus on advancing the AfCFTA initiative, reaffirming UBA’s $6 billion commitment to SMEs across Africa. This initiative, announced in September last year, demonstrates our dedication to supporting the economic integration of our continent,” he further said.

“Moreover, our commitment to promoting gender equality in our business is reflected in our collaboration with the Affirmative Finance Action for Women (AFAWA) protocol. Through this we will provide loans to women-owned SMEs at more concessional rates, with customer friendly collateral terms, aiming to bridge the significant financing gap faced by women in Africa, amounting to $42 billion,” Alawuba noted.

In the same vein, capacity development platforms are to be extended for free or at highly discounted rates while the partners will engage with governments across Africa to create and activate business environments that are more women friendly. It will also expand the Bank’s Green Finance propositions across Africa.

Speaking at the signing ceremony, the Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between two pan-African institutions who are both at the forefront of catalysing growth and development of SMEs will significantly drive economic growth across the continent.

“Small and medium enterprises despite being the backbone of all African economies – they account for 90 percent of the private sector and 60 percent of all jobs – are perceived as risky and therefore have limited access to financing. Through this guarantee facility and the technical capacity development grant support, we will de-risk SMEs with a priority on those that are owned or led by women and those that are within the green sector.”

This partnership is sequel to the announcement made by United Bank for Africa (UBA) Plc, and Africa Continental Free Trade Area (AfCFTA) Secretariat in September 2024 which will help the Bank drive its $6Bn commitment to SMEs across Africa under the AfCFTA initiative//ends

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 35 million customers globally.  Operating in 20 African countries and in the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.

African Guarantee Fund (AGF) is a specialised guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa. To achieve this, AGF increases access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance. Since inception, AGF has unlocked more than USD 3.5 billion in SME financing, through partnerships with 200 partner financial institutions across 40 African countries.

AGF is backed by the following shareholders and sponsors: The Government of Denmark through the Danish International Development Agency (DANIDA), the Government of Spain through the Spanish Agency for International Cooperation (AECID), the African Development Bank (AfDB), French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU), German Development Bank (KfW), French Agency for Private Sector (PROPARCO), West African Development Bank (BOAD), Global Affairs Canada (GAC), USAID’s West Africa Trade & Investment Hub (WATIH), TechnoServe and Norwegian Agency for Development Cooperation (Norad).  African Guarantee Fund is rated AA- by Fitch Ratings.

AFAWA is a pan-African initiative of the African Development Bank Group that aims to close the $42 billion financing gap for women in Africa through comprehensive support. AFAWA aims to unlock $5 billion in financing for women-owned and women-led small and medium enterprises by 2026. AFAWA is supported by the African Development Bank’s partners and donors, the G7 countries, the Netherlands and Sweden, and the Women’s Enterprise Finance Initiative (We-Fi). Through AFAWA, the African Development Bank has approved $1,5 billion of investment for women entrepreneurs in 32 countries, channeled through 96 financial institutions.

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Account enrollment: Court validates CBN’s regulation, permits collection of customers’ social media handles

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…Dismisses concerns, says social media handles not protected by privacy rights

…Financial institutions cleared to collect social media handles for KYC

By Sodiq Adelakun

The Federal High Court in Lagos has ruled in favour of the Central Bank of Nigeria (CBN) in a case challenging the regulation that requires financial institutions to collect their customers’ social media handles as part of the Know-Your-Customer (KYC) procedure.

Recall that the Socio-Economic Rights and Accountability Project (SERAP) had urged the court to compel CBN to withdraw its directive to banks and other financial institutions.

However, in the ruling, Justice Nnamdi Dimgba struck out the suit filed by Lagos-based lawyer, Chris Eke, who argued that the regulation violates the right to privacy of bank customers.

Eke had sought a declaration that the regulation contained in Section 6(a) (iv) of the Central Bank of Nigeria (Customer Due Diligence) Regulations, 2023, is undemocratic, unconstitutional, null, and void, as it contradicts Section 37 of the 1999 Constitution of the Federal Republic of Nigeria (as amended). However, Justice Dimgba ruled that the regulation does not breach the right to privacy of bank customers.

The CBN regulation is targeted to enhance customer due diligence and anti-money laundering measures, and requires banks to collect social media handles, among other personal information, from their customers.

The applicant had asked the court to grant an order of perpetual injunction, restraining CB from enforcing the regulation which requires financial institutions to request customers’ social media handles as part of normal bank customer due diligence requirements.

The CBN in its response to the suit, filed a notice of preliminary objection, challenging the competence of the suit. The apex bank also disagreed that the said regulation constitutes any interference with the private life of the applicant, as claimed.

The judgment came as Justice Dimgba dismissed a suit, stating that the notice of preliminary objection held merit and consequently struck out the case.

During the proceedings, Justice Dimgba emphasised that providing a social media handle is akin to furnishing email addresses, phone numbers, and other contact details for banking purposes.

He argued that such information aids in conducting due diligence to ascertain if an individual is suitable for conducting business with a bank.

Justice Dimgba further explained that the essence of having a social media account implies a willingness to engage in public communication, thus rendering privacy concerns unfounded.

According to him, “First, the Applicant claims that the requirements on the CBN Regulations for financial institutions to request and collect the social media handle of its customers as part of KYC infringes on his right to privacy.”

“This claim is very ambitious and amounts to a very far throw.  The said Regulations are directed to and apply to financial institutions. It does not apply to private individuals such as the Applicant.

“Even if, as appears to be argued, that the Regulations itself would inevitably affect the Applicant, this claim is speculative for the simple reason that in nowhere in the affidavit in support was it stated that the Applicant operates an account with a financial institution and that the said institution had demanded his social media handle.  So the suggestion that he would be affected by this Regulation, albeit negatively, is very speculative and at large.

“Secondly, there is also no deposition to the effect that any financial institution had begun to implement this Regulation and that its implementation had begun to create disruptions and inconvenience against the general population, in which case one could infer that the suit should be legitimated as a public interest litigation.

“Thirdly, assuming even that the banks had begun to implement these regulations, the applicant assuming he maintained any bank accounts or sought to open one, but is being hindered or irritated by the requirement of the Regulation to avail his social media handle as part of KYC, the Applicant still had a choice, which is to refuse to do business with any bank insisting on the information as part of its social media handle, but to seek other alternatives.

“Fourthly, and for all it is worth, I do not see how asking a banking or potential banking customer to provide his social media handle can ever amount to a breach of privacy.

“Granted that Section 37 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) provides inter alia: The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected.

“My view is that the provision of a social media handle is of the same genre as the provision of email address, phone numbers and other means by which a potential customer of a bank can be contacted.

“Thus, it is clear from the face of the Regulations as set out above that email addresses, phone numbers and social media handles are all provided for under clause 6iv just to show that the aim was not to pry on anyone but rather to provide alternative ways by which a customer of the bank can be contacted, and or due diligence conducted on the person to determine if the person is a fit and proper person to extend banking services to.

“I do not see how this infringes on the right to privacy. I should even say that the essence of having a social media account was for one to be publicly visible communication-wise.  It, therefore, appears quite ironic, though wryly, that one can suggest that asking for information about a social media handle with which the individual exposes and immerses himself or herself in the public, can amount to a violation of privacy rights, which rights itself is all about isolation of one from public glare.

“It is also to my knowledge that even in filling some business applications,  personal information of this sort, is sometimes requested, and parties generally oblige. If it does not constitute a breach of privacy, why should it now?

“A social media handle is left at large for the world to see, being in the public space, everyone enjoys the liberty to have access to it whether or not consent was obtained. It would be highly unreasonable to hold the Respondent in breach of privacy for what other persons have access to.

“The apprehension of the Applicant of his social interactions being monitored is manifestly speculative in itself and rather incredulous to believe that the financial institutions have the luxury of time to concern itself with such frivolities.

“On the whole, if I did not sustain the NPO, I would have dismissed the suit for the reasons stated. But the NPO having been sustained, the suit is therefore hereby struck out.”

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N1.3trn power debt: Tinubu approves payment, unveils plan to liquidate gas debts

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President Bola Ahmed Tinubu has given approval for the payment of N1.3trn legacy debts owed power generation companies.

Minister of Power, Chief Adebayo Adelabu speaking at the 8th Africa Energy Market Place 2024 in Abuja said that President Bola Tinubu has approved a plan to liquidate the debts.

According to him, “Mr. President has approved the submission made by the Minister of State Petroleum (Gas) to defray the outstanding debts owed to the gas supply companies to power generation companies. The payments are in two parts, the legacy debts and the current debts. For the current debt, approval has been given to pay about N130 billion from the gas stabilisation fund which the Federal Ministry of Finance will pay.”

“The payment of the legacy debt will be made from future royalties in exchange for incomes in the gas subsector which is quite satisfactory to the gas suppliers. This will allow the companies to enter into firm contracts with power generation companies.

“For the power generation companies, the debt is about N1.3 trillion and I can also tell you that we have the consent of the President to pay, on the condition that the actual figures are reconciled between the government and the companies. This we have successfully done and it is being signed off by both parties now. Majority has signed off and we are engaging to ensure that we have 100 percent sign off.

“The debt will be paid in two ways, immediate cash injection and through a guaranteed debt instrument, preferably a promissory note. This assures the companies that in the next three to five years, the government is ready to defray these debts.”

The Minister further stated that the government was working to get the distribution companies solvent and effective by unbundling their operations along state boundaries.

He insisted that the areas covered by the current DisCos were too large for them to deliver effective services to consumers.

In the same vein, the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Engr. Sanusi Garba lamented the poor financial state of the DisCos, noting that it is difficult for them to raise the needed capital to invest.

Engr. Garba pointed out that the challenges facing the sector were a culmination of all past inactions and missteps by those saddled with the responsibilities of managing the sector both at policy and operational levels.

According to him, “Today when you look at distribution companies they are clearly and technically insolvent, and you also want them to raise capital in terms of debt or equity. It’s a Herculean task. I also want to mention that implementing the power sector reform requires very strong political will to implement decisions that impact on the wider public.”

However, the African Development Bank (AfDB) disclosed that it has so far spent over $450 million to support various power sector projects and programmes with another $1 billion planned to support the power sector reform effort by the government.

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Emirates Airline to resume Lagos-Dubai flights October 1

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Emirates Airline has disclosed that it will resume services to Nigeria from October 1, 2024, operating a daily service between Lagos and Dubai.

This development was announced in a statement on Thursday by the airline, which has its hub in the United Arab Emirates (UAE).

The airline disclosed that flight services will be operated using a Boeing 777-300ER.

“We are excited to resume our services to Nigeria. The Lagos-Dubai service has traditionally been popular with customers in Nigeria and we hope to reconnect leisure and business travellers to Dubai and onwards to our network of over 140 destinations.

“We thank the Nigerian government for their partnership and support in re-establishing this route and we look forward to welcoming passengers back onboard,” Emirates’ Deputy President and Chief Commercial Officer, Adnan Kazim, said.

Recall that Emirates Airlines had suspended its Dubai-Lagos flights in 2022 over its inability to repatriate trapped funds in Nigeria in the heat of the diplomatic row between the two countries.

This comes after Festus Keyamo, Minister Of Aviation And Aerospace Development in a post on his X (formerly Twitter) page had disclosed that he got correspondence from Emirates Airline when he visited Salem Saeed Al-Shamsi, ambassador of the United Arab Emirates (UAE) in Abuja.

 ”Yesterday, I paid a working visit to the Ambassador of the UAE to Nigeria, His Excellency, Salem Saeed Al-Shamsi at the UAE Embassy in Abuja. He handed me a correspondence from the Emirates Airline indicating a definite date for their resumption of flights to Nigeria,” Keyamo said.

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