In a major strategic move to support small and medium-sized enterprises (SMEs) across Africa, the United Bank for Africa (UBA) has introduced a $6 billion special fund in partnership with the African Continental Free Trade Agreement (AfCFTA). This initiative spans 20 countries, with a substantial allocation of $1.2 billion specifically directed towards supporting Nigerian SMEs in their local currency, aiming to fortify and enhance their operational capabilities.
Mr. Muyiwa Akinyemi, the Group Deputy Managing Director of UBA, unveiled this financial initiative, emphasizing that the funds are strategically earmarked for four key operational categories over the next three years. These categories include the automobile industry, transport and logistics, pharmaceuticals industry, and the agro-allied industry.
Akinyemi continues the potential impact of the above-mentioned areas on the economy in each sector, is huge:
- Automobile Industry:
- Job Creation: Increased funding can stimulate growth in the automobile industry, leading to the creation of more jobs in manufacturing, assembly, and associated services.
- Economic Growth: Support for the automobile sector can contribute to overall economic growth, given its interconnectedness with various industries, such as steel, electronics, and services.
- Transport and Logistics:
- Infrastructure Development: Enhanced funding in transport and logistics can facilitate infrastructure development, improving transportation networks and reducing logistical bottlenecks.
- Increased Efficiency: SMEs in this sector may experience increased efficiency and capacity, leading to smoother supply chains and reduced costs for businesses.
- Pharmaceuticals Industry:
- Health and Well-being: Investment in the pharmaceutical industry is crucial for promoting health and well-being. Increased funding can lead to the development of new drugs, improved healthcare infrastructure, and better accessibility to medicines.
- Research and Development: The funds can be directed towards research and development in the pharmaceutical sector, fostering innovation and advancements in medical technology.
- Agro-Allied Industry:
- Agricultural Productivity: Support for the agro-allied industry can lead to increased agricultural productivity, benefiting farmers and agribusinesses. This, in turn, contributes to food security.
- Value Chain Enhancement: Funding can be used to enhance various aspects of the agro-allied value chain, from farming to processing and distribution, leading to increased efficiency and competitiveness.
Speaking on the sidelines of the Africa Special Day during the ongoing 2023 Lagos International Trade Fair in Lagos, Mr. Akinyemi highlighted the significance of the event, considering it one of the largest on the African continent. He underscored UBA’s commitment to the fair, noting that the bank, as a pan-African institution, has been a steadfast sponsor of the event for over a decade.
Mr. Akinyemi further elaborated that the financial support aligns with UBA’s dedication to fostering economic growth and development across the continent. He revealed that the bank consistently collaborates with development finance institutions across Africa to strengthen and boost SME operations, reinforcing UBA’s role as a pan-African financial partner.