By Stephen Ubanna
When President Bola Ahmed Tinubu, accompanied by Olayemi Wale Edun, minister of Finance and Coordinating minister of the Economy, and seven other ministers including some private investors travelled to Riyadh, Capital of the Kingdom of Saudi Arabia to attend the Saudi -Africa summit and the Arab -Africa summit, they knew that they a big challenge at hand ‘’to take the present Administration’s aggressive push for attracting more foreign direct investments, FDI, and expanding business partnerships with the oil rich Arab country.
The Nigerian President who has never missed any opportunity provided by such economic summits in the past to woo investors did not hesitate in taken advantage of the Arab-Africa Economic summit organised at Riyadh,Saudi Arabia, to woo investors with the implementation of African Continental Free Trade Area, AfCTA, agreement that will be having a single trade market of over one billion African.
Indeed, the expectation of the AfCTA, single market, according to United Nations Economic Commission for Africa is that by the end of 2050, the African Continental market would have surpassed the $29 billion mark. This may have emboldened Elumelu, the UBA Chairman to reach out to the Arab country’s investor.
Recall that at the September G20 summit in New Delhi, India, Tony Elumelu, a business mogul, and Chairman UBA Group, who had accompanied the Lagos state born Nigerian President to the summit at a round table talks with the Indian investors had received investment pledges amounting to $14 billion from them. He was said to have succeeded in getting four Indian conglomerates, including Indorama Petrochemical Limited, Jindal Steel and Power Limited were said to agree to invest $14 billion in the Nigerian economy.
The India’s Jindal Steel and Power Limited , JNSP.NS, was said to have committed to pump $3 billion to the Nigeria’s steel sector while Idorama Corporation, on its part,had planned to invest an additional $ 8 billion to expand its petrochemical facility in Nigeria, the most populous country in the African Continent. Two other Indian companies, Skipperseil Limited and Bharti Enterprises, were said have agreed to invest $1.6 billion and $700 million respectively to the Nigerian economy.
The UBA Group, may have repeated the same this time around at Riyadh, Saudi Arabia, on Wednesday, November 9, 2023. Oliver Alawuba, Group Managing Director, GMD, United Bank for Africa, UBA plc a Pan African Bank, may have taken advantage of being participants in the Riyadh summit, to enter into a partnership agreement with the Saudi Export -Import Bank, EXIM, a premier export credit agency in the Arab country aimed at’ ’strengthening business growth and enhancing economic cooperation between the two countries’ economies’’.
The two financial institutions were said to have signed a Memorandum of Understanding, MoU, ‘’to foster economic cooperation and trade relations between the two entities’’. Informed sources told The Value News that the MoU, was signed on the side-lines of the Saudi and Africa n summits in Riyadh.
The partnership between the UBA Group and Saudi EXIM Bank, according to an insider had ‘’outlined the guiding principles for developing cooperation and relationships between the two Banks’’, with the ‘’primary focus on promoting trade through the export of goods and services between the Middle East country and the African countries.
The two Banks were said to have also agreed ‘’to ensure sustained participation in the development of the African economy through continental business relationships that would be facilitated by the new partnership that had been entered into by the two parties.
Going by the terms of the MoU signed by the UBA Group and the Saudi EXIM Bank officials, it was expected also ‘’to work towards supporting joint projects and collaboration involving the export of goods and services from the Kingdom of Saudi Arabia to the African countries and exploring other opportunities to co-finance, co-insure, co-guarantee and the reinsurance of projects jointly undertaken by companies from the two regions’’.
There are indications that the MoU, would also facilitate the exchange of information and technical know-how in the field of export credit policies and practices, the sharing of experiences and best practices through regular meetings, conferences, seminars, and workshops , as well as providing training for Organisation’s staff members and staff exchanges when beneficial to both parties.
Notwithstanding the MoU, that was said to have been by the UBA Group and Saudi EXIM Bank, the value news online Magazine gathered that ‘’the framework for cooperation on specific joint projects will be established under separate agreements, with each party determining the terms and conditions of its support in line with its policies, procedures and national legislation’’.
It was gathered that the exchange of information between the two parties, going by the MoU, will be facilitated by both institutions, while technical know-how in the field of export credit facilities and practices will be shared.
Alawuba, GMD, UBA Group, who could not hide his feelings about the deal with Saudi EXIM Bank had said that through the partnership , both financial institutions would be able to identify and support joint projects and further collaborate in the area of exportation of goods and services between the Kingdom of Saudi Arabia and the African countries.
Hear him: We are happy to join hands with Saudi EXIM Bank in a partneship arrangement that holds great promises for businesses and economies in the Arab country and African countries. He noted that the MoU, that had been entered between the Middle East country and the West African country of Nigeria would not only ‘’ facilitate the export of goods and services but go a step further to solidify their commitment to intercontinental business relationships’ and contribute to the development of the African economy’’.
An elated Alawuba, the GMD, of UBA Group was said to have told those hat cares to listen that ‘’the deal between the two Banks, is particularly promising as the Arab country is currently deepening economic cooperation with theAfrican countries where the Nigeria based Commercial Bank has had established presence in 20 of the African countries ,thus providing the necessary vehicle for deepening this engagement.
The Pan African Bank which offers banking services to more than 37 million Customers’ across 1,000 business offices and customer touch points in the 20 African countries was said to have also established presence in the North American country of the United States , US, city of New York, London in the United Kingdom, UK, and Paris, Capital of France and has extended its operations to the United Arab Emirate, UAE.
The UBA Group, Chief Executive Officer, CEO, was said to have further stated that the partnership between the two distinct Banks would expand the Pan African Bank access to the Asian and other Middle East countries. This is evident as the Nigerian based Money Deposit Bank, MDB, has opened a subsidiary in Dubai, United Arab Emirate, UAE.
Sa’ad Al-Khalb, an Engr and CEO, Saudi EXIM, established in 2020 , with the aim of promoting Saudi non-oil exports and enhancing the country’s competitiveness across various sectors in the global markets had said that ‘’by uniting their strengths the two Banks have set in motion a dynamic platform that will enhance the export of innovative Saudi manufactured goods and services, analyse industrial growth and further magnify their global footprint across the African continent’’.
The Saudi EXIM Bank, helmsman had said that ‘’the deal with the UBA Group will not only augment the country’s export diversification but also contribute significantly to the socio – economic fabric of the African nations ‘’.
He asserted the deal was executed basically to provide financing services, guarantees and credit insurance to customers with competitive advantages to enhance confidence in Saudi’s products and further increase the contribution of the country’s non-oil industries revenue to the government coffers to 50% by 2030 from the present low level of 16%.
He may have thrown a challenge to the Management of the UBA Group when he disclosed that the Kingdom’s vision is to improve the country’s non-oil exports by 20230, through the country’s EXIM Bank which is one of the development Banks that are presently being supervised by the Saudi National Development Fund. This may have informed why the EXIM Authorities are leaving no stone upturned to ensure that the Kingdoms’ target of getting the country’s non-oil export hit 50% by 2030 was met.
