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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