In a significant move towards enhancing the role of small and medium enterprises (SMEs) in Africa’s economic landscape, the United Bank for Africa (UBA) has inked a $6 billion Memorandum of Understanding with the African Continental Free Trade Area (AfCFTA) secretariat. The announcement was made by Babatunde Ajayi, the Head of SME Banking at UBA, during the Nigerian Canadian Business Association Business 2023 Roundtable in Lagos.
Themed “Enabling Growth by Unlocking Access to Capital, Technology, and Markets,” the roundtable served as a platform for discussing strategies to empower SMEs and boost intra-African trade. Ajayi expressed concern over the current state of intra-African trade, highlighting that it remains below 20%, while other continents showcase more robust figures.
In detailing the partnership, Ajayi outlined the focus on four key sectors: agro-processing, automotive, pharmaceuticals, and transport and logistics. He emphasized the potential for import substitution within these sectors, presenting an opportunity for significant gains across the African continent.
During the panel session, Sunny Omeiza, the Director of Trade Promotion at the Lagos Chamber of Commerce and Industry, shed light on challenges faced by SMEs, including issues related to energy, access to finance, and multiple taxes. He also addressed the high cost of production in Nigeria, making locally produced commodities less competitive against imported products.
The Chairperson of the Nigerian Canadian Business Association, Ebi Obaro, underscored the importance of access to capital, technology, and markets as essential pillars for SMEs navigating the complexities of the global economy. Obaro emphasized the transformative potential of technology, stating, “Technology is drastically changing the future of business and holds a lot of potential for small and medium-sized enterprises.”
The commitment of the UBA to inject $6 billion into supporting SMEs aligns with broader efforts to bolster economic growth, promote intra-African trade, and empower businesses to thrive in a rapidly evolving global landscape. As the partnership with AfCFTA unfolds, the focus on key sectors and collaborative initiatives aims to unlock new opportunities and contribute to the advancement of SMEs across the African continent.
