The United Bank of Africa and the Africa Continental Free Trade Area (AFCFTA) have signed an agreement to commence a partnership that would provide about $6 billion in funding to eligible Small and Medium-sized Enterprises (SMEs) across africa over the next three years. The agreement, signed at the 30th Afreximbank Annual Meeting (AAM) in Accra, Ghana, would address SMEs' difficulty accessing funding.
Investing in SMEs is important, as they are pivotal to Nigeria and Africa's economic growth. For the past five years, SMEs in Nigeria have contributed about 48% of the national Gross Domestic Product (GDP). However, increasing difficulty in access to capital has forced many businesses to shut down operations, especially with the harsh economic realities in Nigeria lately. UBA and AFCTA seek to encourage growth/development amongst SMEs by improving access to capital. As a catalyst for economic development, when SMEs are properly funded, they can stay afloat against severe economic tides in Africa.
As more businesses survive, more employment opportunities will be available in Nigeria and Africa. The survival of SMEs will also ensure the goals of the AFCTA in attaining intra-Africa/export trading capabilities can be fulfilled. UBA will also seek to leverage its technology and wide influence as one of the largest financial services providers to boost growth among SMEs in the continent.
All around the continent, SMEs have shown their ability to bridge the financial gap between the urban and rural regions by introducing new technology and services to their markets at all levels, thereby eradicating poverty and inequality if properly supported. UBA and AFCTA will strive to establish an efficient infrastructure that will improve the African market ecosystem and ultimately drive sustainable growth in all countries in the continent