United Bank for Africa (UBA) Zambia has made a commitment to support the Africa Continental Free Trade Area (AfCFTA) to advance regional integration and economic growth. UBA Zambia recognizes the immense potential of the AfCFTA in transforming the African continent into a thrivingeconomic centre, and it is determined to play a pivotal role in this historic initiative.
The AfCFTA, which came into effect in January 2021, is the largest free trade area in the world in terms of participating countries. It aims to create a single market for goods and services, facilitate the movement of capital and people, promote investment, and drive sustainable economic development across Africa. The bank’s support aligns seamlessly with its core values of empowering individuals and businesses to thrive.
As Africa’s global bank, our aspiration is borne out of a collective vision to become the bank of choice for transactions involving Africans and African Businesses; and being the leading provider of offshore correspondent banking services to financial institutions and corporations in Africa.
As Zambia and the rest of Africa celebrate Africa Day on May 25th, 2023, whose theme is “Acceleration of AfCFTAImplementation”, UBA Zambia Board Chairperson Dr. Tukiya Kankasa-Mabula has stressed the importance of supporting economic progress in Africa via initiatives such as the AfCFTA.
Dr Kankasa-Mabula says Africa Day gives an opportunity toUBA Zambia as a Pan-African bank to reflect on how it can contribute to actualize Africa’s great economic potential into reality.
She said, that initiatives such as the AfCFTA allow UBA Zambia to support intra-African trade which will result inmillions of people being lifted out of extreme poverty, job creation and industrialization.
“UBA is one of the institutions driving the Pan African Payment and Settlement System (PAPSS) trial. This payment system, which is being implemented jointly by AfCFTA and Afrexim Bank, intends to make it easier for AfCFTAmembers to pay for products and services in local African currencies, avoiding the need to first convert into a third currency, such as the US dollar. UBA has a presence in five of the seven nations chosen to pilot PAPSS” she said.
Dr Kankasa-Mabula says UBA Zambia is ready to assist the Zambian government and corporate sector in capitalizing on the opportunities presented by AfCFTA and accelerating its implementation, which would result in economic growth for the nation.
She further disclosed, that UBA Zambia is already playing in the space of facilitating intra-African trade, where the bank has supported clients in global trade to the tune of US$93m and US$53m in imports and exports, respectively from January 2023 to date.
“The level of intra-trade is around 20% of these sums, and we believe we have the capacity to handle more. To reiterate our commitment, we stand ready to assist the Zambian government and commercial sector in capitalizing on the possibilities presented by AfCFTA and speeding its implementation, which would result in economic progress for the nation” she added.
“As UBA Zambia, we have the capacity to contribute to the actualization of the vision of the African Union of, “An integrated, prosperous and peaceful Africa, driven by its own people and representing a dynamic force in the global arena”. As a member of the UBA group, the bank is well positioned to serve the African continent’s trade finance needs in the local, regional and global context within Africa and beyond. We need to heed the motto of the founding fathers of the OAU, -African solutions for African problems- “she said.
As the African continent embarks on an exciting journey towards deeper economic integration, the bank’s support will undoubtedly contribute to the realization of the AfCFTA’svision of a united, prosperous, and globally competitive Africa.
The need to boost intra-African trade cannot be overstated. Intra-African trade compares unfavorably with other regions of the world. In 2019, import trade at $70.46BN was approximately 13% of total imports whilst exports at $91.8BN was 19% of intra African exports. Total intra-African trade accounted for 15% of Africa’s total trade. Compare this with intra-regional trade in Europe of 69%; Asia at 59% and Latin America at 21%. There is significant scope for growth of intra-African trade. According to a World Bank estimate, full implementation of AfCFTA by 2035 could to lead to real income gains of nearly $450bn.