UBA pledges $6bn to support SMEs in AfCFTA trade deal
United Bank for Africa (UBA), one of Nigeria’s leading lenders, has announced that it has signed a Memorandum of Understanding (MoU) worth $6 billion with the African Continental Free Trade Area (AfCFTA) secretariat.
The agreement aims to provide funding for Small and Medium Enterprises (SMEs) in order to help them take advantage of the opportunities presented by the AfCFTA.
The Head of SME Banking at UBA, Babatunde Ajayi, made this announcement during the Nigerian Canadian Business Association Business 2023 Roundtable, which took place in Lagos.
The roundtable, themed “Enabling Growth by Unlocking Access to Capital, Technology, And Markets,” was the second of its kind.
During a panel session at the event, Ajayi expressed concern about the low level of intra-African trade, which currently stands at less than 20 percent. In comparison, other continents have seen higher levels of trade between countries.
UBA’s partnership with the AfCFTA secretariat is expected to address this issue by providing financial support to SMEs. By unlocking access to capital, technology, and markets, UBA aims to empower these businesses and enable them to participate more actively in regional trade.
The AfCFTA, which came into effect on January 1, 2021, is a landmark agreement that aims to create a single market for goods and services across the African continent.
UBA’s commitment to supporting SMEs aligns with the broader goal of the AfCFTA, which seeks to promote inclusive and sustainable economic development across Africa.
Through this partnership, UBA aims to play a significant role in driving the growth and success of SMEs in Nigeria and beyond.
He said, “I’m the one driving the newly signed $6bn in partnership with the AfCFTA to fund SMEs across Africa. We are focusing on four sectors – Agro-processing, Automotive, Pharmaceuticals and Transport and Logistics.
“Across Africa, what we found is that these sectors have the highest potential for import substitution and those are the sectors we can easily make huge gains within Africa.”
On his part, the Director of Trade Promotion at the Lagos Chamber of Commerce and Industry, Sunny Omeiza said energy, access to finance and multiple taxation have continued to constitute an albatross for SMEs.
He added that the high cost of production in Nigeria had made the prices of commodities produced by Nigerian SMEs not competitive with the prices of products imported from other countries.
In her welcome address, the Chairperson of the NCBA, Ebi Obaro noted that the three pillars of access to capital, technology, and markets provide essential guidance for SMEs navigating the intricacies of the global economy.
She said, “Technology is drastically changing the future of business and holds a lot of potential for small and medium-sized enterprises. Our goal is to explore the many ways in which we can harness technology to improve efficiency and productivity in businesses in both Nigeria and Canada.”
