Bamidele Ogunwusi, examines the strategic presence of Access Bank across Africa and its plans to redefine Africa’s economic and trade landscape through its operations across 15 African countries.
Reputed as a major player in Nigeria’s banking sector and the biggest bank by customer base and total assets, Access Bank Plc’s move to expand its foray across other African countries through a series of acquisitions of smaller banks has placed it as a major banking powerhouse on the continent.
There is no doubt that the bank, a leading financial services group in sub-Saharan Africa, which is focused on becoming the key financial services aggregator in the region, is in a vantage position to facilitate increased cross-border trade, investment, and economic collaboration.
Access Bank has never hidden its commitment towards shaping the banking landscape and supporting initiatives like the African Continental Free Trade Area (AfCFTA).
The AfCFTA is the world’s largest free trade area bringing together the 55 countries of the African Union (AU) and eight Regional Economic Communities (RECs) to create a single market for the continent. The aim is to enable the free flow of goods and services across the continent and boost the trading position of Africa in the global market.
As part of its mandate, the AfCFTA is to eliminate trade barriers and boost intra-Africa trade. Particularly, it is to advance trade in value-added production across all service sectors of the African economy.
The AfCFTA will contribute to establishing regional value chains in Africa, enabling investment and job creation. The practical implementation of the AfCFTA has the potential to foster industrialisation, job creation, and investment, thus enhancing the competitiveness of Africa in the medium to long term.
Access Bank and Aig-Imoukhuede Foundation’s Alliance
A recent move by Access Bank Group and the Aig-Imoukhuede Foundation and the plan to invest $300 million in expanding the frontiers of Africa’s economy, is seen as a worthy example to other corporate bodies in Nigeria seeking to be part of decision-making in the evolving business and economic realities on the continent.
This move, according to experts, will go a long way to boosting economic performance on the continent, considering the size of the facility.
The fund will see the creation of an African-led NGO in partnership with academics, experts, and philanthropists across the globe who are committed to closing the gap between Africa and the rest of the world.
Aigboje Aig-Imoukhuede, the Chairman of Access Holdings and Co-Founder, of Aig-Imoukhuede Foundation, broke the news at the recent Africa CEO Forum 2024 in Kigali, Rwanda, where the theme of this year’s event was ‘At the table or on the menu?’ hit the nail by the head, saying “We can’t wait to be saved, Africans need to solve Africa’s problems. This $300 million commitment reflects this reality.”
Analysts say there is a serious need for other corporate bodies in Nigeria to follow the example set by Access Group in joining efforts to build a strong African economy for several compelling reasons.
Nigerian businesses are in a pole position to lead intra-African trade growth and rapidly expand their footprint across the continent, according to experts.
“This brings to mind the position of the pan-Africanist and former President of Ghana, Kwame Nkrumah, that “Independence is only the prelude to a new and more involved struggle for the right to conduct our own economic and social affairs.”
According to the Executive Vice President, Intra-African Trade Bank, Afreximbank, MrsKanayo Awani, Nkrumah’s statement underlined the position that despite attaining political independence, Africa’s emancipation was far from complete and the quest for economic independence still lies ahead.
“This quest continues and makes it imperative for us to work collectively to find African solutions to the challenges facing our continent,” she said late last year, when making a clarion call for Nigeria to lead the charge of African trade in her opening remarks at the High-Level Business Roadshow in Lagos, Nigeria.
She stressed the need for the Nigerian Public and Private Sector to actively participate, take advantage of these opportunities to grow and expand their business, drive intra-African trade, and support economic integration under the AfCFTA.
Another crucial move
Another crucial move by Access Bank was a $60 million loan facility from British International Investment (BII) to support the provision of trade finance to five import-dependent African markets.
Access Bank says the facility is expected to grow African trade volumes by as much as $90 million, bolstering financing for imports of goods involved in manufacturing, construction and agriculture.
The lender is targeting companies in DR Congo, Mozambique, Rwanda, Sierra Leone and Zambia, which face long-standing difficulties accessing trade finance as well as unstable currencies, rising interest rates and political uncertainty.
The loan “facilitates the provision of systemic liquidity during a period characterised by a challenging macroeconomic environment,” it says.
“Currency instability in Nigeria can hinder the wider proliferation of dollar-denominated trade loans across African markets, constraining countries’ ability to capitalise on opportunities opening up under the African Continental Free Trade [Area] agreement,” Access Bank adds.
“By specifically targeting import-dependent economies… the improved availability of US dollar-denominated trade loans will ensure availability of key commodities and manufacturing inputs for the production and export of goods.”
The facility also aims to boost financial inclusion by providing affordable financing to Black African-owned businesses and those that meet Access Bank’s gender commitments.
Benson Adenuga, BII’s head of office and coverage director for Nigeria, says the agreement “comes at a time when Nigeria’s fragile economic situation needs additional funding, particularly from countercyclical investors like development finance institutions.”
Admir Imami, director and head of trade and supply chain finance at BII, adds the loan is “a significant step closer to narrowing the trade finance gap in Africa.”
“Access to finance in fragile states is hugely constrained, often these countries are buffeted by macroeconomic events far beyond their control,” he says.
The trade finance gap in Africa – measured as the gap between demand and supply for financing facilities across the continent – is believed to total around $81 billion per year, according to the African Development Bank’s estimates.
UN research published in August found that African SMEs are often perceived as high-risk or struggle to provide sufficient credit information, making the cost of financing prohibitively high.
MasterCard Partnership
One of the tools Access Bank intends to use in its drive to boost cross-border payments with a unified money movement solution to achieve easy financial mediation across the continent was displayed with its partnership with MasterCard.
The partnership, Daily Independent learnt, will enable businesses and consumers to send and receive international payments to and from over 150 countries.
This was disclosed by the partners at the launch of the solution, which would run on the Access Africa platform of the bank in Lagos recently.
Access Bank’s Deputy Managing Director, Chizoma Okoli, while speaking on the partnership said, it will enable the bank to deliver improved services to its customers across its operational footprints.
“Today marks our commitment toward excellence and ensuring that we deliver excellent service to our customers and our partnership today with MasterCard indicates our focus on ensuring that we give our customers the required service delivery that they deserve,” she stated.
Senior Advisory, Retail Banking, Access Bank, Robert Giles, remarked that the partnership would solve challenges relating to diaspora remittance.
He said: “We are introducing our partnership with Mastercard, where we have incorporated solutions to enhance our Access Africa platform. Access Africa began in 2012, connecting two of our larger markets, Nigeria and Ghana. From that point, it has grown to all the countries where we are present.
“We are thrilled to collaborate with Mastercardto advance financial inclusion in Africa through the Access Africa initiative. By combining our strengths, we can unlock new opportunities, bridge the financial divide, and create a more inclusive and prosperous future for all Africans”.
According to Giles, the bank and Mastercard are trying to solve one of the challenges that those in the diaspora contend with.
“The challenge that we are solving here is one for the diaspora. As of the last check, there are about 300 million people in the world who are living outside the country of their birth and payment is a problem. What we are trying to solve with Mastercard is to make payment easier. This partnership with Mastercard is our biggest yet.
“We have worked with an amazing team of people, with Access Bank to create solutions that would help our customers daily transfer funds within the continent, outside the continent and, most importantly, to the continent. We know the diaspora flow into the continent is important to the growth of our economy,” he averred.
According to the World Bank, cross-border remittances continue to play an important role in Africa’s economy, with flows to sub-Saharan Africa increasing by approximately 1.9 per cent in 2023 to $54 billion as a result of strong remittance growth in Mozambique, Rwanda and Ethiopia, with Nigeria accounting for 38 per cent of the remittance flows.
Mastercard’s Country Manager for West Africa, Folasade Femi-Lawal, said the collaboration was in recognition that there were challenges in cross-border transactions.
“Mastercard, leveraging the technology that we have, is partnering with Access Bank to shape the landscape of cross-border transactions across the African continent with secure international payments through Access Bank branches and digital platforms. It is to drive financial inclusion. It is a pledge to democratisefinancial services for all individuals and businesses across the countries,” he noted
Mastercard Divisional President, Sub-Saharan Africa, Mark Elliot, declared that collaboration marked the company’s unwavering commitment to advancing financial inclusion and innovation across Africa.
He explained, “Mastercard is not just about debit, credit and what we might expect. Through innovation and innovative technology, we provide consumers with ease, seamless and peace of mind type of opportunities in collaboration with banks, like Access to deliver possibilities.”
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