Outgoing Group Managing Director of pan-African
banking group, United Bank for Africa (UBA) Plc Mr Philips Oduoza has called
for increased collaboration among African central banks in order to drive
intra-African trade on the continent.
He said this on
July 22, 2016 when he delivered the
fourth Valedictory Lecture of the Chartered Institute of Bankers of Nigeria
(CIBN) on the topic “The Emergence of a Nigerian Pan-African Bank” to a parked
hall of bankers and financial industry players.
Oduoza used the lecture to share his experience and
challenges in helping build one of Africa’s largest banking groups, UBA Plc,
not forgetting the lessons learnt from the bank’s expansion into Africa.
He spoke extensively on UBA’s expansion into
Africa, the rational for the expansion and the strategies adopted to derive
maximum value and reduce the risks of UBA’s foray into different African
countries.
Speaking specifically on the need to improve
intra-Africa trade in order to drive the growth of Pan-African banks like UBA,
Oduoza decried the low levels of intra-African trade. “The volume of formal
intra-African trade is relatively low and estimated between 10 per cent and 12
per cent of Africa’s total trade. Comparable figures are 40 per cent in North America
and about 60per cent in Western Europe”
He listed lack of the required infrastructure and
policies as the major challenges to intra-Africa trade while noting that the
adoption of policies like tax holidays, waivers, and market interventions to
promote investments in sectors outside commodities will help diversify African
economies and drive intra-African trade.
“I strongly feel African Central Banks have a
greater role to play by collaborating to promote the development of cross
border trade platforms in order to encourage the informal sector to join the
formal banking system. When this is done, the opportunity will be readily
captured by Pan-African banks.”
He also noted that “Intra-African trade growth will
be further supported by the introduction of a visa-free travel policy across
the continent by the African Union as well as the development of intra-regional
transport infrastructure.”
Oduoza harped on the need for improved
financial inclusion on the continent, noting that research has shown that only
34per cent of African adults have a bank account as at 2014. He suggested the
adoption of mobile money services could help drive financial inclusion on the
continent.
“Data shows about 12 per cent of the population in
Sub-Saharan Africa have a mobile money account as against 2per cent of adults
worldwide. I believe mobile technology has the potential to vastly expand
financial inclusion across Africa. Pan-African banks with a good understanding
of the continent can leverage their technology platform to capture this
opportunity. Invariably this will mean a growth in retail banking as most of
those financially excluded fall within this bracket”
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