United Bank for Africa (UBA), through its UK subsidiary UBA UK, and British International Investment (BII) have signed a letter of intent to explore cooperation in trade finance across Africa. The planned partnership aims to expand access to financing for African businesses, especially those involved in intra-African trade, targeting the continent's trade finance shortfall.
TACKLING AFRICA'S TRADE GAP
The African Development Bank estimates Africa’s trade finance gap at more than $80 billion a year, a shortage particularly severe in supply chain finance. UBA UK, as the group's trade operations hub, would use its presence across 20 African countries to identify and structure transactions tailored to local needs. “As the Group's hub for Trade Operations, UBA UK is uniquely positioned to connect African businesses with the international financial system,” said Lok Mishra, chief executive of UBA UK. “Working alongside BII, we can extend that capability further — mobilising capital where it matters most and helping to close the trade finance gap that holds back so much African potential,” he added.
BII, the UK’s development finance institution, views the collaboration as a way to advance its ambition to expand access to trade and working-capital finance, particularly in frontier markets. “Trade finance is a critical enabler of [private sector] growth,” said Chris Chijiuitomi, managing director and head of Africa at BII. “We welcome the opportunity to collaborate with UBA Group, whose pan-African network and deep institutional relationships can help advance our ambition to expand access to trade and working-capital finance, particularly in frontier markets,” he added.
The initiative comes amid the African Continental Free Trade Area (AfCFTA), which aims to create a single market of 1.4 billion people with a combined GDP of $3.4 trillion. For that vision to become reality, African businesses need access to the financing required to expand trade.
LEVERAGING AFCFTA MOMENTUM
The UBA UK-BII initiative targets limited access to trade finance, one of the continent's biggest structural bottlenecks. BII could support deals seen as too risky by traditional lenders, in line with its mandate.
The deal builds on UBA's pan-African network. UBA UK's hub facilitates trade operations with global players.
SME FOCUS AMID RISKS
The collaboration prioritizes businesses involved in intra-African trade. In Nigeria, where UBA originated, such tools could support economic activity.
Challenges loom: the deal has yet to be finalized, with due diligence and internal approvals ahead. The partnership remains at the exploration stage across jurisdictions.
BROADER ECONOMIC RIPPLE
This partnership dovetails with regional momentum around AfCFTA. External partnerships like UBA-BII aim to support liquidity for trade.
For UBA, the tie-up aligns with efforts to expand trade services. BII's involvement reflects UK interest in African markets. As Mishra put it, UBA UK aims to work with BII to mobilize capital where it matters most.
Ultimately, this letter of intent represents an initial step to address Africa's trade finance barriers, channeling AfCFTA's promise into potential capital flows. With further assessments underway, the collaboration could support finance for businesses across borders.