We are in the perfect position to support businesses in Africa and globally

Over his 25-year career in the financial services space, Oliver Alawuba, Group MD/CEO of UBA, has achieved major milestones and contributed to shaping the banking landscape across Africa. He is in conversation with Michael Nwadike on the bank’s multinational growth and its ambition to accelerate intra-African trade, as well as its recent partnerships with major institutions such as the Saudi Exim bank.

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Perhaps nothing is more important fora prosperous Africa than increasing intra-African trade. What is UBA’s  contribution to making the African Continental Free Trade Area (AfCFTA) become fully operational?

Intra-African trade is actually our key area of strength. Our presence in 20 African countries is mainly to drive intra-African trade and our partnership with AfCFTA is also to drive intra-African trade. You are aware that Afreximbank has a Pan-African Payment and Settlement System (PAPSS) for business transactions across Africa – and UBA is at the forefront of that partnership. 

So, intra-African trade is important and Africans need to trade more with each other; that will further improve our economic development across the continent.

What is the structure and function of UBA’s international operations and how do they impact businesses across the continent?

UBA is focused on African development. A lot has been happening in the continent and we recently met with development partners to discuss the agenda. 

Some of our customers also share the same development priorities for Africa. And I believe that this is our time, this is the time for UBA, to work with other development partners and corporate organisations across Africa to develop the resources and opportunities that are available on the continent. 

We are today present in 20 African countries and four others elsewhere. We believe that Africa has tremendous opportunities and we need to have partners
and institutions that will be able to harness these opportunities for the people. So, UBA is well-positioned to facilitate business within Africa and the rest of the world. 

Before you became the Group Managing Director of UBA Plc, you were the CEO of UBA Africa. Given such roles, what do you think are the critical factors redefining banking business in Africa?

The most important thing today is for Africa to drive financial inclusion. We still have a lot of Africans that are left out of the banking industry and that is where UBA comes in. 

UBA is at the forefront of using digital technology to drive financial inclusion, and we [also] think that we need to build strong African institutions that can support infrastructure development, support SMEs and the development of our continent.  

Our goal is to work with several development partners who share the same vision – the vision that we need to improve development in the continent. This development has to be done by Africans working with like minds that believe the continent must move forward.

Are there agreements and partnerships between the bank and other like-minded institutions to show that UBA is ready for these tasks ahead?

We have taken critical steps to cement our commitment to African businesses. Remember that UBA had, working with the AfCFTA, put forward $6bn for SME financing. 

We have also had talks with the International Finance Corporation (IFC), Afreximbank and the African Development Bank (AfDB). 

We are looking at how to partner to move Africa forward, particularly regarding SMEs and the financing of women-owned businesses. We believe that African women can be empowered to do more for African development and we are at the forefront of these initiatives.

Do you have any plans for further expansion of your international operations?

We will continue to expand UBA’s presence in Africa. Today, we are consolidating; we think that within the countries where we are present, we can do more to increase our share of business. We also think that if the opportunity comes for other African expansions why not, we will take that opportunity. After all, UBA is for Africa.

There have been discussions that banks and banking regulators should be concerned about the rising interest rates and their impacts on loan repayment in this period of economic crisis. What is your take on that?

Banking is a highly regulated business and we are happy with the good role our regulators are playing across various markets where we operate. We will continue to work within those regulations but we should not focus so much on the risks that we forget the opportunities. 

We have to strike a balance and manage the risks and we also have to develop the opportunities that we have.

Can you elaborate on the recent pact signed by UBA and Saudi Export-Import Bank (Saudi EXIM)?

UBA Plc, and Saudi Export-Import Bank (Saudi EXIM), a premier export credit agency in the Kingdom of Saudi Arabia, announced a partnership aimed at strengthening business growth and enhancing economic cooperation between their economies.

Both institutions signed a Memorandum of Understanding (MoU) to foster economic cooperation and trade relations between the two entities. The MoU was signed on the sidelines of the Saudi and Arab-African Summits in Saudi Arabia.

The partnership between UBA Group and Saudi EXIM Bank outlines the guiding principles for developing cooperation and relations between the two banks, with a primary focus on promoting trade through the export of goods and services between the Kingdom of Saudi Arabia and the African markets.

Apart from collaborating in these areas, both institutions will also ensure sustained participation in the development of the African economy through intercontinental business relationships that will be facilitated by the new partnership.

The MoU will also work towards supporting joint projects and collaboration involving the export of goods and services from Saudi Arabia, and exploring opportunities to co-finance, co-insure, co-guarantee, and engage in reinsurance projects jointly undertaken by companies from both regions.

It will also facilitate the exchange of information and know-how in the field of export credit policies and practices,
the sharing of experiences and best practices through meetings, conferences, seminars, and workshops, as well as provide training for each other’s staff members and staff exchanges when beneficial to both parties.

The framework for cooperation on specific joint projects will be established under separate agreements, with each party determining the terms and conditions of its support in line with its policies, procedures, and national legislation.

Also, the exchange of information will be facilitated by both institutions, while technical know-how in the field of export credit policies and practices will also be shared.

Looking ahead, what message do you have for shareholders?

We love our shareholders. I am sure they would be smiling for a while now and I want to tell them that we are here to ensure that at the end of the day, they will have more dividends. So, it is cheery news from UBA and there will be a lot more for them. 

The bank has 34.199bn shares in issue and these are being named the highest performing stock in the banking sector for 2023, demonstrating the bank’s robust growth trajectory and unwavering market confidence. For instance, 2023 was a splendid year as UBA emerged the most profitable bank in Nigeria. 

Are there international transactions that have impacted UBA’s performance in recent years?

UBA was appointed as the Local Arranger and Local Depository Bank for the $3.3bn FX liquidity support facility for Nigeria in partnership with Afreximbank, providing solutions to economic issues in Nigeria characterised by a shortage of FX liquidity.

Having demonstrated a very strong capacity, the bank recently attracted a $175m financial package from the African Development Bank Group and this comprises $100m in long-term senior debt, $50m of trade finance medium-term senior debt and a $25m risk participation programme.

The long-term senior debt will enhance UBA’s capacity to finance projects in Nigeria in the key sectors of infrastructure, agriculture and related value chains, as well as manufacturing, energy, and SMEs.

The facility will be complemented with technical assistance from the Affirmative Finance Action for Women in Africa (AFAWA) initiative to boost access to finance and technical assistance to women-led SMEs.

Market participants have begun to appreciate the latent capacity in UBA’s business model as the bank unlocks enormous potentials in its pan-African and international operations. Its unique competitive advantage lies in people, processes, and technology. 

With its unwavering commitment to excellence and execution, the bank continues to set benchmarks in the banking sector, reinforcing its position as Africa’s global bank of choice.

UBA is listed on the Premium Board of the Nigerian Stock Exchange in recognition of the bank’s strong adherence to international best practices on corporate governance and remains committed to creating value for its over 275,000 esteemed shareholders spread across the globe.

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Michael Nwadike

Michael is a financial journalist based in Lagos, Nigeria.