UBA secures $175m from AfDB to share to Nigerian farmers, businesswomen, others

A statement by the Africa Development Bank (AfDB) says the bank has approved about $175 million for United Bank for Africa (UBA) to help finance critical projects in Nigeria.

The package includes $100 million in long-term senior debt, $50 million in trade finance medium-term senior debt, and a $25 million risk participation programme. UBA Chairman, Tony Elumelu and AfDB's President, Akinwunmi Adesina

The fund to help UBA finance projects in Nigeria The programme also seeks to enhance UBA’s capacity to finance projects in Nigeria in essential sectors such as infrastructure, agriculture, other value chains, manufacturing, energy, and SMEs.

AfDB announced its financial responsibility to develop projects in Nigeria totals about $4.4 billion, making it the most significant investment in Africa.

The loan will come with technical assistance from the Affirmative Action for Women in Africa (AFAWA) initiative to increase access to technical assistance for women-owned small and medium enterprises (SMEs).

AfDB said: “We are pleased to support UBA with this package, which aligns with four (4) of the African Development Bank’s High five priorities: Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialise Africa.”

AfDB’s Ahmed Attout, the bank’s Acting Director for Financial Sector Development, said the intervention will address demands for trade in Nigeria and Africa by providing medium-term finance to support exports and the importation of intermediate goods needed to sustain vital economic sectors.

Small and medium businesses to benefit from the fund

Attaout also said that the funding will unlock stable and affordable financing for SMEs, which are the engine of Nigeria’s economic growth and job creation.

The statement also said the trade finance senior debt will provide UBA with the required countercyclical dollar liquidity to support SMEs and local corporates involved in export-import activities in the short to medium term.

The funding aims to boost UBA UK’s role as a regional bank and widen access to international markets for underserved African-issuing banks.

The AfDB and UBA UK will share 50/50 default risk on a portfolio of eligible trade transactions originated by African issuing banks and indemnified by UBA UK.