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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