The African Continental Free Trade Area (AfCFTA) Secretariat and United Bank for Africa (UBA) have signed an agreement to provide financial support to small and medium enterprises (SMEs) within the AfCFTA in order to boost intra-Africa trade.
The agreement was signed on Tuesda,y June 20, 2023 on the sidelines of the Afreximbank Annual Meeting 2023 which took place in Accra, Ghana.
The partnership aims to foster economic growth, job creation, and increased regional integration across the African continent. It is also intended to catalyse industrialisation to improve the socio-economic well-being of the continent.
According to the McKinsey consulting firm, Africa’s 85-95 million SMEs account for 80 percent of the continent’s private sector employment, which makes their growth extremely important.
The agreement acknowledges the need to bolster formal and informal economic operators, including women and youth. It seeks to break down the barriers to intra-Africa trade and productivity, including SME access to finance and markets.
Under the agreement, the UBA will provide financial services to SMEs in four main areas: agro-processing, automotive, pharmaceuticals, transport and logistics
During the signing, Wamkele Mene, the Secretary-General of the AfCFTA Secretariat, expressed optimism about the potential impact on intra-Africa trade. He stated, “Access to finance is a key factor that SMEs require to effectively participate in the AfCFTA. Through this collaboration with UBA, we aim to empower SMEs and create an enabling environment that facilitates their active involvement in cross-border trade within Africa.”
The Secretary-General of the AfCFTA Secretariat also noted that the support offered by the UBA, “will enable SMEs achieve industrial driven growth and export development in Africa.”
For his part, Muyiwa Akinyemi, deputy managing director at UBA, observed that the bank has a robust network spread across 20 countries on the continent.
“In UBA, we say your small business is big business. The agreement will “make the continental free trade area a reality,” Akinyemi added.
He highlighted the bank’s commitment to supporting Africa’s economic transformation and the aspirations of SMEs. He said, “UBA is excited to partner with the AfCFTA in driving economic growth and fostering regional integration. Our focus is to ensure that SMEs have access to the necessary financial resources and expertise to expand their businesses across the African continent”.
The collaboration between the AfCFTA and UBA is expected to contribute significantly to the achievement of the goals set by the African Union’s Agenda 2063, which seeks to promote inclusive growth, sustainable development, and increased intra-African trade.
As the implementation of the AfCFTA progresses, partnerships like the one between AfCFTA and UBA are vital for facilitating the growth and success of SMEs in Africa, unlocking their potential to drive economic transformation and prosperity across the continent.