The African Continental Free Trade Agreement (AfCFTA) opens $504.17 billion African goods and $162 billion services to Nigerian companies. Banks with wide African networks have greater opportunity to explore opportunity presented by the AfCFTA and untapped $93 billion informal trade market in the continent. Banks are also expanding their diaspora remittance channels and deploying technology to enhance their services position them at the centre of trade and businesses opportunities that AfCFTA presents.
Trade is the lifeline of great economies. For Nigeria and many Africa countries, trade not only cements inter-country relationships, but brings prosperity to the people.
Still, businesses that will tap from the opportunities presented by trade, including the $93 billion transactions that happen informally across the African continent, are those that have the identified network and technological backbone to harness such benefits.
The need to formalize Africa’s trade opportunities led to the implementation of the African Continental Free Trade Area (AfCFTA), which also come withe wider opportunities.
The AfCTA trade bloc offers a potential market of over 1.3 billion people and a Gross Domestic Product size of over $3 trillion. According to The United Nations Conference on Trade and Development (UNCTAD), there is the potential for intra-African trade to rise to 15.5 per cent as a share of total African trade by 2022 compared with 10.2 per cent from 2010.
Many commercial banks have taken strategic steps to explore the AfCFTA gains and bring prosperity to their customers. From United Bank for Africa, Access Bank, Ecobank, Guaranty Trust Bank, among others, commercial banks are taken new steps through network expansion and commitment to attracting foreign capital inflows through diaspora remittances.
For finance, United Bank for Africa (UBA) with wide network, says its spread and huge investment in technology keeps it ahead of competition in exploring both $93 billion informal trade opportunities and access to $504.17 billion in goods that the AfCFTA implementation presents.
UBA is in an advantage position to leverage its presence in several African countries, to support Nigerian businesses seeking to expand into new markets in Africa, by providing trade facilities to those with strong potentials for growth.
Group Managing Director/CEO, United Bank for Africa, Kennedy Uzoka, said the UBA has positioned itself to be of support to these businesses and industries exploring the AfCFTA gains. This it does through seamless remittances channels, use of seamless digital banking channels and expanded credit for their operations.
Managing Director, Ecobank Nigeria, Patrick Akinwuntan has said the success of African Continental Free Trade Area (AfCFTA) will rely heavily on the financial services industry’s ability to facilitate the liberalisation process.
Access Bank will be leveraging on its spread across the African continent and deep investment in technology to reap gains coming from the AfCFTA.
For the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, the AfCFTA offers significant opportunities for the Nigerian private sector to expand into new markets, and seek new export opportunities, particularly in the area of Manufacturing, ICT, Agriculture and Financial services, given Nigeria’s growing advantage in these areas relative to her counterparts in other parts of Africa.
He said that the AfCFTA, when fully implemented, could afford Nigerian companies preferential access to African markets worth $504.17 billion in goods.
The Vice President, Professor Yemi Osinbajo last week estimated the value of informal trade in the African Continent to be in the region $93 billion yearly.
Osinbajo, who stated this in a message delivered at a roundtable on industrialisation in Africa with the theme: Positioning African Industries for Economic Transformation and Continental Free Trade, organised by the Manufacturers Association of Nigeria (MAN) to celebrate its Golden Jubilee, said while the African Continental Free Trade Area (AfCFTA) offers limitless opportunities for the industrialisation of Africa, authorities across the continent must take the right policy actions to actualise them, pointing out that such actions include the protection of local industries and improving value chains.
He said part of the guiding principle in preparing industries for AfCFTA, is “ease of payments across borders and implementation of the protocols on free movement of persons.” The VP said in the pre-recorded message that “it is particularly important to rapidly operationalise the effort by Afreximbank to establish a Pan-African Payments and Settlement Platform, saying this will go a long way in creating the desired continental payments system and also in facilitating cross-border informal trade which he put at about $93 billion per annum.
Osinbajo underscored the importance of the AfCFTA as the fulcrum for Africa’s development. As he put it: AfCFTA is indispensable if industrial development is to take off in Africa because it offers wider markets and economies of scale which are essential for manufacturing to be competitive. “We must take policy actions to create an environment in which businesses can thrive.
Diaspora remittance and economy
The CBN and banks have continuously collaborated to improve Nigeria’s remittance infrastructure, ease the process of international money transfer and simplify the experience for senders and recipients.
For these stakeholders, the efficiency of remittance services, especially as provided through commercial banks’ and International Money Transfer Operators (IMTOs’) partnerships are critical to boosting dollar liquidity in the economy.
Such channels for sending and receiving funds from the diaspora are expected to be seamless and convenient to their customers.
According to Akinwuntan, “Nigerian banks have strong capital and their operating synergies have been tremendous for the past five years, particularly in the digital banking space. Nigeria is a leading player on the continent in payments required to facilitate trade; mobilisation of savings required to galvanise the economy; focus on the SMEs’ segment, which is the largest employer of labour, especially in the critical industries such as agriculture as Africa is a continent that is rich in commodities; education of our teeming population and health.‘’
Uzoka said that UBA, with operations in 20 African countries, has used its wide network to boost foreign capital flows to the economy. The UBA partnership with top IMTOs is ensuring convenience in sending and receiving money from anywhere in the world.
He explained that through the bank’s remittance partners, customers can receive money directly into their UBA account or pick up cash at any of its branches nationwide.
UBA has also created money transfer services that allow customers to deposit, transfer and withdraw cash in local currencies across 20 African countries.
According to UBA, to send or receive money through IMTOs would require completing a form indicating the IMTO service, Bank Verification Number, savings or current UBA account, valid means of Identification for non-account holders (National I.D card, International Passport, Drivers licence or Nigerian Voters Card).
For receivers, a Personal Identification Number (PIN) code provided by the sender is required.
The bank says it remains one of the leading banks in terms of remittance services across Africa. “We are currently ranked number two in Money Gram, number three in Western Union and Ria money transfer services. In April, our cumulative transaction count was 33,000 and the amount remitted through UBA was about 14.03 million,” it said.
The bank says it remains committed to providing ease and convenience for money transfers across the world.
UBA’s partnership with MoneyGram, Western Union, Ria Money Transfer, World Remit, Flutter Wave, AFTAB (Ace Money Transfer), Cash Pot, Colony Capital (Fincode), Swift Payment, Naira Gram, IDTPS Boss Resolution, SmallWorld, Sendwave and Omnex has enabled it to serve more people in the remittance market.
Country Manager, Nigeria and Ghana, at WorldRemit, Gbenga Okejimi, said the company was excited by the fact that it can continue to enable the transfer of remittances to more people across Nigeria whilst also supporting the Nigerian government in its efforts to strengthen the economy.
WorldRemit founder Ismail Ahmed created WorldRemit to ensure that the diaspora community could send money back home easily and through a safe platform. The company said it is constantly evolving, innovating and adapting to ensure that our customers’ needs are met efficiently. It added that customers of UBA can access US Dollar payout through bank transfer and cash pick up options.
The World Remit does not require a minimum amount for transfer. However, the initial transaction is subject to a maximum of $2,000, while the maximum limit per transaction is $7,500, the total of which must not exceed$50,000 every six months. There are no charges to the beneficiaries.
For instance, with Africash account and non-account holders of UBA can send and receive money in local currency from all its branches across Africa.
“The customer just need to fill Africash form, provide Bank verification Number (BVN), open a savings/current account with the bank. ForVerification holders, a valid means of Identification is required while the receiver should have the Personal Identification Number (PIN) code provided by the sender to collect funds,” the bank said in an emailed report.
Also, the UBA Connect gives its customers the option of sending or receiving money across 20 African countries with ease. This service is also available to account and non-account holders of the bank.
The bank explained that all the channels are safe, secure, provide competitive rates, easy and convenient.
Flutter Wave is safe, secure, and beneficiaries receive transfers within minutes and service available to UBA account and non-account holders. competitive rates and fees.
Africash services are available in cash collection and account transfers. “With the account transfer, the beneficiary needs not to worry about visiting any business location for payment as funds are instantly credited to the beneficiary’s account from the send point. Africash is available in US dollars and local currency, where regulations allow US dollar transfer and receivers are to indicate preferred currency”.
The Africash pricing reflects the market realities in each country of operation but, in all, prices remain competitive. On average, the price is one per cent or less. The transfer limits vary from one country to another. However, a $50,000 weekly transfer limit applies based on countries’ regulations.
Also, customers can open accounts with Instant Money Transfer International inflow and credit same into the account.
The UBA Nigeria Western Union Money Transfer is also a major remittance channel. The Western Union is an international money transfer service, which has been in service for over 149 years.
“It enables you to send and receive money worldwide. With a network in over 200 countries, Western Union controls 20 per cent of all remittance transactions. It is a fast and easy way to send or receive money in naira or dollars and is available at any UBA Branch,” the bank said.
The receiver of the fund through Western Union is expected to provide Money Transfer Control Number (MTCN), sender’s full name, receiver’s full name, answer to test question (if provided), location (Country) where money is being sent from as well as an amount to be received.
Also to be provided are valid, non-expired government-issued photo identity card which includes International Passport, Voter’s card, BVN, Nigerian Driver’s Licence.
In the Fast channel, a customer account is credited in approximately 48 hours, depending on the time of initiation of the transaction. Customers can calculate their fees, receive transfer notifications and track transactions online. The customers can also take advantage of loyalty schemes and such services as standing instructions.
The UBA Nigeria Western Union Money Transfer enables people to send and receive money worldwide. With a network in over 200 countries, Western Union controls 20 per cent of all remittance transactions. It is a fast and easy way to send or receive money in naira or dollars and is available at any UBA Branch.
Money Gram uses a high-performance, web-based application that makes it easy for customers to receive their money within a few minutes of their payment request.
“You can now send money to over 200 countries from any UBA branch to family and friends. The service has a maximum send limit of US $1,000 naira equivalent per customer every quarter and is available to account and non-account holders”.
“With Money Gram, money can be received directly into a UBA account or at a UBA branch with the reference code received from the sender. At the branch, the beneficiary will complete and submit the ‘receive form’. Once details have been verified, the beneficiary receives cash in their local currency”.
RIA Money Transfer is one of the largest international money transfer companies in the world. With a worldwide network in over 140 countries, RIA allows customers to receive the money within minutes directly into their UBA naira account or cash at a UBA Branch close to you from friends and family living abroad.
