Zenith Bank CEO Urges Funding for SMEs, Infrastructure Development for AfCFTA’s successful implementation

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Ebenezer Onyeagwu

The Group Managing Director and Chief Executive Officer (CEO) of Zenith Bank, Mr. Ebenezer Onyeagwu, during the virtual Africa Investment Risk and Compliance Summit 2020, has called on African banks to support the funding of small and medium size enterprises (SMEs) as well as the development of continental infrastructure that would sustain the implementation of the African Continental Free Trade Area (AfCFTA).

The summit was organised by EBII Group with the theme : “Attracting and Sustaining Investments in Africa Post COVID-19 – Stay Ahead of the Compliance Curve.”

Other speakers at the summit included the Secretary General of AfCFTA Secretariat, Mr. Wamkele Mene, and the Commissioner for Infrastructure and Energy at the African Union Commission, Dr. Amani Abou-Zeid.

According to Onyeagwu,  the expected benefits of AfCFTA could elude the continent if SMEs are not adequately funded and encouraged to grow through the provision of concessionary long-term funds to build capacity.

African banks, according to him, need a template in terms of homogeneity to support SMEs.

He said: “Without financial support for the SMEs, they cannot be anything but SMEs. But if we provide funding support for them, we will have opportunity to identify and incubate those that have potentials and build them up to become the future champions of Africa.”

Onyeagwu added that without a massive investment in infrastructure, the continent would not optimise the benefits of AfCFTA.

“We need a massive road system and rail that can interconnect the different sub-regions. We will need to make a heavy demand on the like of the African Development Bank, the African Export and Import Bank and the African Finance Corporation. We need to get them involved so that they can start rallying round and sitting together to identify the immediate critical infrastructure that we need to revamp,” he said.

Onyeugwu also called on banks to intensify the promotion of financial literacy and inclusion, which would bring in businesses that are outside the banking system and expose them to modern ways of doing business and running enterprises.

He stated that this would enable the banks to penetrate the grassroots and identify hidden potentials.

Onyeagwu also identified the creative industry as one of the segments of SMEs that could lead Africa to economic prosperity if it is appropriately funded and provided with the right kind of environment and infrastructure to enable its operators to concentrate on their creativity, while the “banks will fund and get their products and services to the market.”

“So, as banks in Africa, we need to begin to consider building centre of excellence that will be equipped with the right infrastructure that will enable, for instance, talented fashion designers not to bother on how to acquire machines.

“Indeed, banks in Nigeria have started to put together N30 billion and we are looking at building a creative centre for the ICT, fashion designing, music and cinema. The whole essence is that once we build this centre, whoever is into any of these sectors will come in, rent a space, do his business and move on.

“If we do not support Africa; if we do not sow the seed of greatness for Africa, there is no way any person will come from outside and do it. It is we in Africa that will need to incubate and build businesses and get Africa exposed to the world,” he added.
He, however, noted that Africa needed massive reforms from its governments that would deal with the issues about trade, tariff and trust as well as encouraging the evolution of homogeneous models that would address money laundering, due diligence and know-your-customers to obviate the limitations imposed by the absence of a monetary union in the continent.

According to him, the African banking industry needs homogeneity in practising responsible banking to sustain and protect the environment.

He stated that this would checkmate carbon footprints and ensure that any business that is denied credit as a result of environmental assessment would not get credit in any part of Africa.

Onyeagwu identified cyber risk as an endemic problem that calls for continental response to checkmate.

“If we do not have collaboration across the banks within the continent, we will not be able to checkmate it. So, I advocate that it will be fitting for Africa to adopt a uniform practice and code of conduct in terms of how we approach and manage cyber risks,” he said.

He identified the implementation of AfCFTA as an opportunity that Africa could not afford to miss, adding that Zenith Bank is developing and building a trade portal that would create visibility for African businesses, product and services and improve intra-African trad

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