AfCFTA (African Continental Free Trade Area) will unify African trade and most elements of the real sector. That would be a huge opportunity for Nigerian banks with deep continental footprints. United Bank for Africa (UBA) with presence in about 20 African countries, more than any in Nigeria, will become the truly “Africa’s global bank” it has used as a slogan.
One of the most critical redesigns in African commerce, as a result of AfCFTA, will be capital markets. And I expect Nigeria to be the final destination since we bring not just deeper capital, relatively in Africa, but purchasing power as Africa’s largest economy and most populous country. Nigeria’s Broad Street will become the Wall Street of African companies as a result of AfCFTA.
If companies in Benin Republic or Mali want to raise capital, within the free movement of most factors of production, Nigeria should be the right domain. UBA is a bank that can galvanize that system and help them trade and do business continent-wide. UBA’s geographically spread in Africa is a very key strategic asset for its major customers. You can also put Standard Bank and Ecobank there.
- Ecobank (Togo/Nigeria) operates in at least 36 African countries
- UBA (Nigeria) operates in at least 20 African countries
- Standard Bank (South Africa) operates in at least 17 African countries
More so, Nigerian capital market operators have opportunities: work with the Nigerian Stock Exchange, Securities and Exchange Commission and make our market to become the domain of choice not just for primary listing but cross-listing for leading African brands. For countries without developed capital markets, Nigeria will be there for them. This is where banks like Ecobank and Standard banks with spread across the continent can play real games: we are already here to help you, and we are solid in Nigeria.
UBA, Ecobank and Standard Bank South Africa will become the most vital banking institutions in Africa upon the full implementation of AfCFTA. For banks without the footprints, now is the time to go into alliance with these institutions for deeper footprints for opportunities which AfCFTA will stimulate in Africa.
By the time government goes through the expected recapitalization in Nigeria, our banks will drop in numbers. I am not sure most investors will like to waste resources on some of the small banks in Nigeria for recapitalization when the economy will be open to practically any big bank in Africa. The PAPSP is a game changer for Africa, and many banks will struggle as fees will go!