United Bank for Africa (UBA) has obtained a $175 million financial package from the Africa Development Bank (AfDB) Group. This comprehensive facility consists of $100 million in long-term senior debt, $50 million in trade finance medium-term senior debt, and a $25 million risk participation program.
The long-term senior debt is designated to boost UBA’s capacity to finance vital projects across Nigeria’s infrastructure, agriculture, manufacturing, energy, and SME sectors. This initiative aims to stimulate economic growth and support value chains, particularly benefiting SMEs, women-owned businesses, and various sectors critical to the country’s development.
Accompanied by technical assistance from the Affirmative Action for Women in Africa (AFAWA) initiative, this facility aims to provide financial support and technical assistance to women-owned SMEs. Additionally, the trade finance senior debt will supply UBA with necessary dollar liquidity, benefiting SMEs and local corporates engaged in import-export activities in the short to medium term.
Moreover, the unfunded risk participation agreement intends to strengthen UBA UK’s role as a regional confirming bank. It seeks to broaden access to international markets for African issuing banks, with both AfDB and UBA UK sharing the default risk on a portfolio of eligible trade transactions.
Lamin Barrow, AfDB’s Group Director General for Nigeria, expressed alignment with AfDB’s priorities in supporting UBA with this package, focusing on vital sectors such as energy, agriculture, trade, and SMEs.
Ahmed Attout, AfDB Acting Director for Financial Sector Development, emphasized the intervention’s significance in addressing the trade finance gap in Nigeria and Africa. He underscored the package’s role in supporting exports, sustaining economic sectors, and providing stable funding for SMEs.
UBA’s Group Managing Director/CEO, Oliver Alawuba, highlighted the facility’s contribution to Nigeria’s critical economic sectors, particularly underscoring support for women-owned businesses and SMEs, the backbone of economic growth.
This financial boost signifies a collaborative effort toward fostering economic development and supporting key sectors in Nigeria through enhanced access to funding and trade finance.
