In a significant development in the African banking sector, United Bank for Africa Plc (UBA), under the leadership of renowned Nigerian businessman Tony Elumelu, secured a substantial $175 million facility from the Africa Development Bank (AfDB) Group. Tony Elumelu’s move marks a pivotal moment for UBA, emphasizing its role in driving economic growth across the continent.
The breakdown of the $175 Million financial package
The package secured by UBA comprises various components, each targeting specific areas of need within the African economy. This includes $100 Million in Long-term Senior Debt which portion is designated to bolster UBA’s capability in funding essential projects in Nigeria, focusing on sectors such as infrastructure, agriculture, manufacturing, and energy. It also aims to support small and medium-sized enterprises (SMEs), which are crucial for the country’s economic development.
Also, a $50 Million in Trade Finance as Medium-term Senior Debt to provide countercyclical dollar liquidity. It will support SMEs and local corporates engaged in export-import activities, crucial for the short to medium-term economic stability.
In addition, a $25 Million Risk Participation Program to help mitigate risks associated with the bank’s operations, providing a safety net for its expansive financial activities.
How UBA is Committed to the Nigerian economy and its dominance in African financial landscape
Oliver Alawuba, UBA Group Managing Director and CEO expressed his enthusiasm regarding the facility. He emphasized that this financial boost would significantly deepen UBA’s support for key Nigerian economic sectors, particularly focusing on women-owned businesses and SMEs.
In 2023, UBA reported a staggering profit of $570 million for the nine months, marking a significant surge in its financial performance. This impressive growth is attributed to the revaluation of investment securities in naira terms, following the unification of the Naira. UBA’s performance underscores its commitment to empowering African businesses, particularly in the context of the African Continental Free Trade Area (AfCFTA).
UBA’s alignment with AfDB’s strategic priorities
The financial package aligns seamlessly with the African Development Bank’s core priorities, which include initiatives like Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialize Africa. Lamin Barrow, AfDB Group Director General for Nigeria, highlighted that this intervention is set to address the unmet demand for trade finance in Nigeria and Africa, offering medium-term finance crucial for exports and importation activities.
In conclusion, Tony Elumelu’s UBA acquisition of the $175 million facility from AfDB is more than just a financial transaction. It is a testament to the bank’s commitment to driving economic growth and financial inclusion across Africa. This strategic move not only enhances UBA’s capacity to support crucial sectors but also positions it as a pivotal player in Africa’s economic development narrative.
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