United Bank for Africa (UBA) Plc has signed an agreement with the Africa Continental Free Trade Area (AfCFTA) Secretariat to invest $6 billion as funding for African Small and Medium Enterprises (SMEs) within the next three years.
A breakdown of the $6bn investment shows that a total of $1.2bn has been budgeted for the year 2023; $1.9bn for 2024, and $2.88bn for 2025.
UBA signed the agreement with AfCFTA on the sidelines of the opening ceremony of the 30th Afreximbank annual meeting held in Accra.
By this agreement, UBA, with the aim of boosting intra-African trade, will provide financial services in four main areas, including agro-processing, automotive, pharmaceuticals, and transport and logistics, to small and medium enterprises (SMEs) in all the 20 African countries where UBA operates.
These countries are Nigeria, Benin, Ghana, Sierra Leone, Liberia, Cote D’Ivoire, Senegal, Mali, Burkina Faso, Guinea, Zambia, Tanzania, Kenya, Uganda, Mozambique, Gabon, Congo Brazzaville, Congo DRC, Chad, and Cameroon.
One of the key initiatives of the AfCFTA agreement focuses on improving access to finance and markets for SMEs to encourage their growth and contribution to the socio-economic development of Africa.
UBA Group’s Deputy Managing Director, Muyiwa Akinyemi, who signed the agreement on behalf of the UBA Group, noted that as Africa’s global bank, UBA was committed to supporting SMEs in Africa, especially given its robust network, which is spread across the 20 countries.
He said, “We entered into this partnership because we see the future of intra-African payments developed by AfCFTA, which will ease payment constraints across 54 countries in Africa (with about 40 different currencies) powered by the Pan-African Payment and Settlement System (PAPSS).”
Mr Akinyemi said, “However, we need to develop these businesses before we can talk about helping them trade, which is the strength of UBA, as we are vital in supporting SMEs, and with our presence in 20 African countries, we say your small business is big business.”
On his part, the Secretary-General of the AfCFTA Secretariat, Mr Wamkele Mene, who spoke on the agreement with UBA, emphasised the need to catalyse Africa’s industrialisation and boost intra-African trade to improve the socio-economic wellbeing of the continent and its people, which he noted was a key factor behind the partnership.
Mr Mene said, “The Secretariat is committed to supporting SMEs as critical drivers of African economies. We recognise the financing gap SMEs face on the continent and intend to mitigate this gap through this important partnership. The four identified areas of support which UBA will provide will enable SMEs to achieve industrial-driven growth and export development in Africa, which in turn aligns with the objectives of the AfCFTA.”
