At the margins of the Afreximbank Annual Meeting 2023 taking place in Accra, Ghana, 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 African Continental Free Trade Area (AfCFTA) agreement was established with the objective to catalyse the industrialisation of Africa and to boost intra-Africa trade, with a view to improving the socio-economic wellbeing of the continent and her people. According to McKinsey, Africa’s 85-95 million SMEs account for 80% of private sector employment, which makes their growth extremely critical to the attainment of the AfCFTA’s objectives.
The AfCFTA Agreement not only acknowledges the need to bolster both formal and informal economic operators, with particular attention to SMEs, including women and the youth, but also aims to break down the barriers to intra-Africa trade and productivity through different initiatives. One of these initiatives focuses on improving access to finance and markets for SMEs to encourage their growth and contribution to the socio-economic development of Africa.
Therefore, the Secretariat and UBA today, are cementing a strategic partnership through the Agreement. The latter shall entail UBA providing financial services in four main areas, namely; Agro-processing, Automotive, Pharmaceutical, Transport and Logistics to African Small and Medium Enterprises (SMEs), to facilitate the implementation of the AfCFTA Agreement and its objectives.
During the signing of the agreement, H.E. Wamkele Mene, Secretary-General of the AfCFTA Secretariat noted that “The Secretariat is committed to supporting SMEs as critical drivers of African economies. We recognize the financing gap faced by SMEs on the continent and intend to mitigate this gap through this important partnership. The four identified areas of support which will be provided by UBA, will enable SMEs achieve industrial driven growth and export development in Africa, which in turn aligns with the objectives of the AfCFTA.”
Commenting on the partnership with AfCFTA, Mr. Muyiwa Akinyemi, Group Deputy Managing Director of UBA Plc noted that “UBA remains committed towards supporting SMEs in Africa, especially with the banks’ robust network, which is spread across 20 countries, adding that “In UBA, we say your small business is big business.”
Akinyemi added that “UBA will make funding available to SMEs across to make the continental free trade area a reality.”