The race to rebuild the global economy after the lockdowns is gathering pace. The spike in inflationary trends, disturbing food insecurity levels, failing channel management systems, the sharp increase in the number of businesses going bust, and alarming infrastructure deficit form the recent consequences of the COVID-19 outbreak.

Hence, development agencies and state economic managers on global and regional scales have sprung into action to revive the hailing economies. Recovery aids, financing instruments are being sourced to balance up the intervention policies developed across markets to stimulate quick recovery from the various shocks of the viral outbreak.

Africa, home to over 1.2 billion people, is striving hard to meet its obligations of catering to the food needs of the burgeoning population as well as closing the massive infrastructure deficit evidenced by the inconsistent supplies of electricity, decaying road transport systems, low internet penetration level, growing unemployment rate and faulty municipalities across its 30.3 million km² surface areas.

According to the German Institute for Global and Area Studies (GIGA), the lockdown rules that were implemented across the African continent led to drastic short-term income losses for informal workers as very few of the workers had access to social security protection.

Foreign direct investment (FDI) also dropped drastically as trade declined dramatically on the continent while the government capacity to keep the economy active ebbed leaving little or no means of support for the state managers.

A swift rebound from the deep deficits on the continent would require strong public-private partnerships on a socioeconomic level. The private sector which provides as much as 90% of the employment in the economies and plays active roles in implementing key growth policies are a strong driver of national and regional economic agenda. It is hard to imagine a faster post lockdown recovery on a large scale without effectively engaging the private sectors.

Absa, a pan Africa financial institution is spearheading the private sector’s interventions to stimulate swifter recovery in trade, investment and infrastructure development. The bank is deploying its wider operating capability, well-tailored offerings and experience on a global scale to support the various post lockdown recovery efforts embarked upon by some state actors.

One of the recent moves made by Absa to shore up efforts to rebuild the African economy is a collaborative agreement with Proparco, a French development finance institute, to help corporate SMEs recover from the lockdown’s shocks.

The collaborative economic support agreement aims to source and disburse $20 million to SMEs operating in sectors such as construction, manufacturing, tourism, retail, which have been badly hit by the Covid-19 crisis especially in South Africa.

By helping the SMEs segment stay afloat through the provision of accessible loan instruments, Absa is addressing a critical issue on the continent.

Of course, the African SMEs segment played a significant role in the continent’s impressive 5% average growth in the past decade. The segment has been a fitting lever pulled to attract investment to the continent over the years. It also topped other segments in generating employment for the population and tax revenue for various governments.

Therefore, by providing a support framework for the segment through collaborative efforts, Absa is leveraging its impressive developmental network to strengthen a key locus of economic recovery in the post-lockdown operating environment.

Speaking about the collaborative agreement between Proparco and Absa, Parin Gokaldas, Group Treasurer at Absa, said:

“The agreement further enables Absa to provide financial support to corporate SMEs, a vital component of the local economy, as it recovers from the impact of the Covid-19 pandemic. We are particularly pleased with the agreement as we view the relationship with Proparco, a significant development finance institution in Africa, as strategically important.”

For Emmanuel Haye, deputy head of the Financial Institutions Debt Group, covering Africa and Middle East, at Proparco: “…We are delighted to start this partnership with Absa Bank, a key player with a strong pan-African presence and to be part of a much-needed counter-cyclical role.”

In the same vein, Absa was recently involved in raising a $400 million syndicated loan for the Africa Finance Corporation (AFC), a leading infrastructure solutions provider, which targets critical infrastructure development on the continent. The pan African bank, through its Corporate and Investment Banking division, along with a few other global banks, acted as a bookrunner and mandated lead arranger to help the AFC secure the development loan.

The involvement in the syndicate loan arrangement to boost infrastructure development in Africa is another significant intervention effort that speaks to the development focus of the bank.

Banji Fehintola, Senior Director & Treasurer at the AFC, explained: “This loan will be instrumental in working towards plugging the infrastructure gap we are facing on this continent, especially following the damaging effects of the Covid-19 pandemic. We remain committed to partnering with experienced, like-minded organisations to provide sustainable finance for infrastructure development in Africa while achieving the lowest borrowing costs of any institution on the continent.”

Precisely, robust investment in infrastructure development enables trade and creates a vibrant environment that powers businesses. It provides millions of jobs each year in building and maintenance for the local population.

According to a statement released by the AFC recently, the syndicated loan will support Africa’s post-pandemic recovery “through critical development of infrastructure.” Africa no doubt is in need of strong infrastructure development support in raising the standards of road and freight networks, broadband penetration levels, and the upgrading of the continent’s electric power facilities.

Sadiq Abu, Chief Executive Officer, Absa Nigeria said: “As a pan-African financial institution committed to deepen growth and create shared value, Absa is consistently deploying its vast knowledge of the operating environment to support both public and private development actors in stimulating faster post-lockdown economic recovery on the continent.”

As a socially responsible organisation, Stanbic IBTC Holdings PLC is big on positively impacting lives within its host communities in Nigeria through its Corporate Social Investment (CSI) initiatives.

Stanbic IBTC’s CSI is hinged on three core pillars: education, health, and economic empowerment, and aims to meaningfully contribute to enhancing the wellbeing of Nigerian communities, especially at the grassroots.

One of such is the Together4ALimb initiative, where the company provides support to enhance the quality of life of children with missing limbs. Through the provision of prosthetics and educational trust funds worth millions of naira, Stanbic IBTC ensures these young people can live a normal and productive life like their counterparts.

The organisation understands the need to make an impact in the lives of children living with missing limbs, either by birth or via accidents, and is determined to do so through its signature CSI. It is important to give these children hope for the future, and enable them see the endless possibilities for greatness in life, irrespective of societal prejudices they face owing to their circumstances, which could pose a threat to the achievement of their dreams and aspirations.

The educational trust support provides a platform for young people to access quality education needed to enable them maximise their potential and become whatever they want to be.

The signature CSI comes with an awareness drive, “Together4ALimb charity walk”, which is designed to draw attention to this health challenge and hopefully garner financial and government support for survivors.

The annual Together4ALimb walk has recorded over 5,000 participants since inception.

Stanbic IBTC reiterates its commitment to empowering and creating better narratives for communities in Nigeria. In 2021, the organisation took on several value-driven charitable initiatives such as school renovations, orphanage, nursing homes and special needs centre visitations, all targeted at empowering and enriching the lives of less privileged Nigerians.

A memorable CSI initiative taken on last year by the organisation was a visit to the Ketu Special Children Centre, where the organisation presented medical and physiotherapy equipment to the facility. The donations made will go a long way to help improve the wellbeing of children living with cerebral palsy, a condition which causes other health issues like vision impairment, hearing and speech problems, and learning disabilities.

Other CSI initiatives taken on by Stanbic IBTC last year include the presentation of hospital equipment to Batagarawa Primary Health Care, Katsina; presentation of a CT Scan room and other medical facilities to Mother and Child Hospital, Kano State; the donation of medical items to Mother and Child Hospital, Ebonyi State; the commissioning of a borehole donated to the LEA Primary School FCT Abuja; renovation of the Antenatal Care Unit at General Hospital, Mushin, Lagos, as well as empowering young people via financial knowledge on the World Savings Day in various schools nationwide and mentoring sessions for students at Estate Senior Grammar School, Ilupeju, amongst others

Stanbic IBTC is focused on delivering relevant and impactful CSI projects in communities where development is most needed. In 2022, Stanbic IBTC promises to deliver more social and economic initiatives to facilitate growth and improve the welfare of the Nigerian communities, especially those in rural areas.

Tomi Somefun

Managing Director/CEO

Unity Bank Plc

Unity Bank Plc has partnered Nigerian rice farmers under the aegis of Rice Farmers Association of Nigeria, RIFAN to unveil a mega rice pyramid on the occasion of the National Rice Festival held in the Federal Capital Territory, Abuja.

The event, which coincided with the flag-off of the dry season farming, was used to showcase the gains produced by rice farmers in driving self-sufficiency in rice production through the Central Bank of Nigeria’s Anchor Borrowers Programme, ABP.

Speaking to newsmen at the event, the Managing Director/Chief Executive Officer of Unity Bank, Mrs. Tomi Somefun, while going down memory lane on the support of the rice farmers by the Bank since the inception of the Anchor Borrowers Programme, ABP commended the rice farmers for their unwavering belief and collaboration in the implementation of the intervention programme, adding that as the PFI (Preferred Financial Institution) for the ABP transactions, the Bank will continue to support the farmers and ensure that more smallholder farmers get the requisite financial support to boost rice production.

She said: “Our strategic partnership with RIFAN started in 2018 when we financed about 273,000 smallholder farmers. This was the largest single-ticket transaction in that year. This financing cut across 33 states of the Federation including the FCT.

“In 2019, the Bank increased the tally by financing another 146,810 smallholder farmers for the wet and dry season farming. This funding cut across 35 States of the Federation including the Federal Capital Territory (FCT).

“Additional funding was granted to finance additional 221,450 smallholder farmers of the Association across the 32 states of the Federation including FCT for the wet season and additional 300,000 hectares was financed in sixteen states for the 2020 dry season cropping season.

“As of March 2021, the Bank has financed no fewer than 190,000 smallholder rice farmers across 35 states including the FCT, Abuja.”

Speaking further, she said: “The rice pyramids we see here today is an example of the resilience of the farmers and should be replicated in all states with a focus on the crop they have a competitive advantage.

“As we gear the programme towards deepening its penetration to reach more farmers, we encourage all beneficiaries of the Intervention Programme to always utilize the inputs judiciously in order to key into Federal Government’s goal of attaining food sufficiency, diversification of the economy from oil, job creation for the teeming youth and poverty reduction”.

“We remain optimistic that RIFAN under the able leadership of the National President, Aminu Goronyo, will continue to engage its members to drive higher performance under the ABP.”

Through the strategic initiative of the ABP, Nigeria has made incredible gains in rice production over the past six years raising production to significant levels.

Official reports show that from an average yield of 1.8 metric tonnes per hectare in the pre-ABP era, the initiative has increased the country’s average yield per hectare for rice paddy and maize to about five metric tonnes per hectare.

Similarly, the average capacity utilisation per annum of domestic integrated rice mills has jumped to 90 per cent, from the 30 per cent that was the case in the era preceding the advent of the ABP.

Statistics show that there has been a significant reduction in the country’s rice import bill, from a monstrous $1.05 billion prior to November 2015, to the current figure of $18.50 million, annually. The programme has also created an estimated 12.3 million direct and indirect jobs across the different value chains and food belts of the country.

The continued growth of mobile phone usage provides a huge opportunity for banks to embrace a digital-first approach for young populations – if they make the right moves now, writes Roy Zakka.

The appetite for innovation in Africa is huge. Digital adoption is rapid and nowhere is this being seen more than in the banking sector.

Around half of all banks in Africa have stated an ambition to become digital-first banks, so the banking landscape on the continent is set to change irrevocably over the coming years. I believe that Africa’s willingness to embrace new technologies originates from a strong entrepreneurial spirit, particularly in sub-Saharan Africa.

Challenges remain in Africa, not least in terms of paper-based processes that are still highly prevalent, but the ability of mobile banking to liberate customers and allow them to do business on their own terms is seen as very appealing in a continent which features a large young population base (60% of the African population is under the age of 25).

Such a high consumer interest in digital presents the banking industry in Africa with a major challenge – but also opportunity. Banks are quickly waking up to the fact that they cannot afford to ignore the growth of digital or they risk being left behind.

Banking in Africa is at a tipping point and ready for a major leapfrog in terms of digital technology and customer interaction. Technological infrastructure and adoption is now at a level that is accelerating the digital switch in Africa.

This change has been driven by really strong customer demand, with customers looking to bank primarily through the mobile channel. We’re also seeing a real desire by banks to transform their operational structures and processes and at the same time provide a better service, cut costs and increase revenues.

Importantly, African banks are waking up to the fact that partnering with Fintech companies is a logical step in speeding up their move to digital, with the latest research indicating that 80% of African banks now see fintech and challenger banks as partners for growth, with just 8% deciding not to work with them because they regard them as competitors.

• What’s Driving Africa’s Digital Transformation?

The root of the digital banking push that’s picking up the pace across Africa is the proliferation of mobile phones.

Around half of the population in Sub-Saharan Africa now have a mobile phone subscription. Currently, just 1 in 6 of these users have access to 4G, but that number is forecast to double to 28% of the population by 2025. Nigeria has roughly 170 million mobile phone users.

However, only 10 to 20 percent of the population uses smartphones while the rest rely on more traditional mobile phones.

The Covid pandemic has ushered in a rising demand for digital services and, as economies recover, mobile technology is set to become integral to the way people live and to how businesses function.

When it comes to banking, digital solutions offer the potential for enthusiastic mobile adopters to bypass off-putting traditional banking processes – such as rigid and onerous account creation requirements and the need to visit a branch – in order to access financial services and make frictionless regional and international payments.

• Overcoming Africa’s Banking Challenges

While there is plenty of cause for celebration, there are concerns too that progress is not being shared equally in Africa. Banks are often accused of focusing too heavily on their wealthier customers, with only 41% of Africans considered to be financially included, according to research by Orange Business Services.

Part of the problem is that mobile technology is evolving at two speeds. Sometimes it can be easier for banks to extend services to smartphone users, but there are also a lot of customers who still rely on legacy feature phones. The fear is that digital banking will leave those non-smartphone users behind, once again excluding customers who have long suffered from being unbanked.

I believe that a dual approach is required to negate the threat of a two-tier banking system in Africa.

Banking via USSD sounds very basic, but it’s much more sophisticated than might be expected. Through USSD, users can check their balance, make payments, block cards, and send or receive money from their handset. Dual systems enabled traditional mobile phone users and smartphone users, supporting the transition across Africa to smartphones over the next few years

• Services in Action

An example of how these types of services are helping to transform the digital progress of Africa’s banks is our successful partnership with United Bank for Africa in Nigeria – a bank that serves 22 million customers across 20 countries.

By delivering a feature-rich smartphone package and fully functioning USSD solution, we were able to build out an ecosystem that distributed a variety of services through different channels for UBA customers. This gave the bank’s customers the ability to access both traditional and neobank services through a single platform.

With demand for digital banking rising (mobile transactions in Nigeria alone grew by 83% in 2020), banks in Africa find themselves in a race to position themselves as innovative and frictionless and to secure market share.

In October this year, Nigeria became the first African nation to launch a digital currency – the eNaira – a move to expand access to banking, enable more remittances and grow the economy by billions of dollars. In response to this government initiative, Layer quickly deployed the eNaira wallet for Zenith, and because the Layer platform is built on Open architecture, the UBA team was able to add eNaira capability in record time.

Nigeria’s young, tech-savvy population has eagerly adopted digital currencies. Cryptocurrency use has grown quickly despite a Central Bank ban in February on banks and financial institutions dealing in or facilitating transactions in them.

Banks such as UBA are realising that innovation doesn’t always require a complex solution. Instead, what they are finding is a suite of intuitive and easy-to- rollout solutions that can eliminate problems and frustrations for customers and provide them with a modern banking service that is fit-for-purpose in the modern world.

NB: Roy Zakka is CEO and Co-founder of Layer.