United Bank for Africa (UBA) intends to harness the power of its strong presence across the continent, as well as its trade finance solutions, to help drive intra-African trade, writes the bank’s group deputy managing director, Muyiwa Akinyemi.


The importance of globalisation cannot be overemphasised. No economy can exist successfully on its own without interacting with other countries. To this end, global trade, the vehicle by which different countries can procure or sell products and services via a system of often complex supply chains, is a key driver of the world’s economy.

The products that are bought and sold in global trade cut across all sectors, including oil and gas, agriculture, processed goods, fashion items, electronics, equipment, machinery, fast moving consumer goods (FMCG), etc.

The African continent, made up of 55 countries with a population in excess of 1.2 billion people, plays a key role in global trade. It is the largest trade market in the world, a status it attained following the signing of the African Continental Free Trade Area (AfCFTA).

As at the end of 2020, total trade imports into Africa were worth around U$$500bn while total exports stood at about US$375bn.

Across Africa, the top three items of import were mineral fuels, nuclear reactors and vehicles, while those of export were mineral fuels, solid minerals and ships/boats.

The continent’s top three import partners were China, India and the US, and its top export partners were China, India and Spain.

As at 2019, intra-African trade imports stood at US$70.4bn, comprising approximately 13% of total import trade, while intra-African exports amassed to US$91.8bn, approximately 19% of total exports from the continent. In comparison, intra-regional trade in Europe was 69%, Asia 59% and Latin America 21%, which suggests a significant scope for growth in intra-Africa trade.

The African trade finance gap as of Q1 2020 was estimated to be around US$87bn.

It was in recognition of this gap that the AfCFTA was conceptualised, primarily to create a single continental market for goods and services, characterised by the seamless movement of people, businesses, products, services and investments between African countries via the use of digital technology platforms, systems, regulation, procedures and policies. The expectation is that this will lead to increased development of the African continent and an exponential increase in trade between African nations in the medium to long term.

Of the 55 countries in Africa, all have signed the AfCFTA with the exception of Eritrea.


Driving regional trade

One of the major banks positioned to enable the achievement of the objectives of the AfCFTA and drive regional trade across the continent is the United Bank for Africa (UBA) Plc.

Aptly known as Africa’s global bank, UBA is a leading financial institution on the African continent and beyond, with presence in 20 countries spanning Central, Eastern, Southern and Western Africa. The bank also has a presence in the US, UK, France and, more recently, Dubai, UAE.

In Africa, the bank’s activities are segmented into three regions: Central African Economic and Monetary Community (CEMAC), East and Southern Africa (ESA) and West Africa (WA).

The bank’s trade customer segments in Africa are characterised as follows:

  • Corporates (large multinationals, FMCG, energy industry, top commodity traders): 61%
  • Commercial (manufacturers, mid-market companies, suppliers): 28%
  • Retail (MSMEs and others): 11%

UBA’s rich history spans over seven decades, providing products and services to its 27 million+ corporate, commercial, SME, consumer and personal (retail) banking services customers across the African continent through diverse channels: over 1,000 business offices and customer touch points with 2,600+ ATMs, 87,000+ point-of-sale machines and robust online banking services. Additionally, UBA offers pension custody and related services.

Over the years, the bank has proven its expertise and capacity in key sectors of economies across Africa, especially in oil and gas, infrastructure, agriculture, and commodities. This has positioned UBA as the preferred partner for structured solutions to African governments and corporates.

The bank has developed a robust array of trade offerings that leverage technology to drive import and export trade across Africa.

A more recent focus of the bank has been in the area of non-oil export, where UBA Nigeria has led the way in terms of market share of trade business processed through the bank from 2019 to 2021.


UBA’s footprint

In the CEMAC countries, UBA currently has operating offices in Chad, Cameroon, Congo Brazzaville, the Democratic Republic of the Congo and Gabon, where it processed in excess of US$16bn in trade volumes in 2021 alone.

The bulk of the trade in this region is focused on the following commodities:

  • Export trade: mineral fuels, wood, cocoa, extracted mineral ores, ship boats and slag
  • Import trade: meat and edible meat offal, mineral fuels, vehicles, nuclear reactors, edible fruits and nuts, electrical machinery and equipment, ships and boats

As at 2020, the total volume of export and import business in the countries in this region where UBA has presence was 6.3% and 3.1% of total African trade respectively.

UBA has also led the way in invisible trade, processing over 25,000+ trade transactions between January and April 2022. The services covered here are school fees, medical fees and living expenses.

Across West Africa, UBA currently has operating offices in Benin, Burkina Faso, Côte d’Ivoire, Ghana, Guinea, Liberia, Mali, Nigeria, Senegal and Sierra Leone.

The major export and import commodities in these regions are as follows:

  • Export trade: cotton, cocoa, rubber, edible fruits, oil seeds, solid minerals, mineral fuels, ships and boats, animal and vegetable fat, nuclear reactors, fish
  • Import trade: cereals, mineral fuels, vehicles, nuclear reactors, edible fruits and nuts, electrical machinery and equipment, ships and boats

As at 2020, the total volume of export and import business in the West African countries where UBA has presence was 8.8% and 19.8% of total African trade respectively.

In East and Southern Africa, UBA has operating offices in Kenya, Mozambique, Tanzania, Uganda and Zambia.

The major export and import commodities in these regions are as follows:

  • Export trade: coffee, tea, cocoa, spices, live trees, plants, mineral fuels, solid minerals, edible fruit, nuts, aluminium ores, copper, slags
  • Import trade: mineral fuels, nuclear reactors, electrical machinery and equipment

As at 2020, the total volume of export and import business in the countries where UBA has presence in East and Southern Africa stood at 5.6% and 8.1% of total African trade respectively.


Promoting regional trade

UBA promotes intra-African trade, leveraging a suite of offerings such as import and export finance, letters of credit, bills for collection, import interventions, trade advisory services, documentary collections, post-import financing and pre-export financing.

These are all processed by means of platforms built using the latest technologies and processes.

To further improve the volume of intra-African trade, UBA is playing a leading role and is one of the major banks driving the pilot of the Pan-African Payment and Settlement System (PAPSS) launched by the African Export-Import Bank (Afreximbank). The system aims to facilitate the settlement of payments for goods and services in local African currencies to African trading nations under the AfCFTA.

Some of the benefits of PAPSS are:

  • Instant confirmation and settlement of transactions
  • Increased turnaround time
  • Competitive transaction fees
  • Reduction in FX exchange rate losses
  • Person-to-person settlement of transactions

Moreover, the system involves a low-cost, low-risk controlled payment clearing and settlement system via Mansa, a repository platform for due diligence.

The pilot countries selected to drive PAPSS are:

  • Ghana
  • Liberia
  • Nigeria
  • Sierra Leone
  • Cameroon
  • Gambia
  • Guinea

UBA is present in five of these countries and to date PAPSS is live in three: Sierra Leone, Liberia and Guinea. Ghana and Nigeria are scheduled to go live in Q3 2022.

One of UBA’s key mandates is to facilitate the resolution of the trade finance gap, using its export and import trade vehicle.

While this is the near-term plan, the longer-term plan is to enable businesses to build capacity and ramp up local production, manufacturing and processing to improve earnings from export trade. The overriding objective is to increase gross domestic product, reduce employment rate and increase per capita income across the African continent.