AfCFTA and UBA Forge $6B Partnership to Propel SMEs in Transport, Logistics, and More

InfoStride News reports that a groundbreaking development has taken place in the realm of Small and Medium Enterprises (SMEs) in Africa, particularly in sectors such as transport and logistics, agro-processing, automotive, and pharmaceuticals. The United Bank of Africa (UBA) and the African Continental Free Trade Area Secretariat (AfCFTA) have inked a significant $6 billion Memorandum of Understanding (MoU), signaling a commitment to provide funding support to SMEs operating within these sectors.

The revelation was made by Babatunde Ajayi, the Head of SME Banking at UBA, during a panel session at the Nigerian Canadian Business Association Business 2023 Roundtable held in Lagos. The event, themed “Enabling Growth by Unlocking Access to Capital, Technology, And Markets,” gathered experts and stakeholders to discuss crucial issues affecting the business landscape, particularly for SMEs.

Ajayi emphasized the need for increased intra-African trade, highlighting that the current levels are below 20 percent compared to more robust figures seen on other continents. With the newly signed $6 billion partnership with AfCFTA, UBA aims to channel its focus towards supporting SMEs in key sectors, including Agro-processing, Automotive, Pharmaceuticals, and Transport and Logistics. Ajayi underscored the immense potential for import substitution within these sectors, signaling an opportunity for significant economic gains across the African continent.

However, Sunny Omeiza, the Director of Trade Promotion at the Lagos Chamber of Commerce and Industry, raised concerns about the challenges faced by SMEs in Nigeria. In his speech, he pointed out that issues such as energy constraints, limited access to finance, and the burden of multiple taxation have continued to impede the growth of SMEs in the country. Furthermore, he highlighted the adverse impact of the high cost of production in Nigeria, making locally produced commodities less competitive in comparison to imported products.

Ebi Obaro, the Chairperson of the Nigerian Canadian Business Association (NCBA), also shared insights during the roundtable discussion. She emphasized the significance of three key pillars—access to capital, technology, and markets—in guiding SMEs as they navigate the complexities of the global economy. Obaro noted that technology plays a transformative role in the future of businesses, especially for small and medium-sized enterprises. Her vision is to explore diverse ways in which technology can be harnessed to enhance efficiency and productivity in businesses across both Nigeria and Canada.

In essence, the collaboration between UBA and AfCFTA, as reported by InfoStride News, signifies a significant step towards empowering SMEs in strategic sectors across Africa. The $6 billion funding commitment reflects a tangible effort to address existing challenges and unlock the potential for economic growth and development within the SME landscape on the continent. The discussions at the roundtable further underscore the importance of addressing systemic issues such as access to finance, energy, and the role of technology in propelling SMEs towards success in the evolving global business environment.