Africa: Banks, Other Lenders Urged to Finance Africa's Economy

3 July 2020

The Group Chief Executive Officer, United Capital Plc, Mr. Peter Ashade, has called on financial institutions to develop innovative home-grown financing solutions to support economies in Africa in order to propel the continent's growth.

Ashade, stated this at the maiden edition of United Capital Pan Africa e-Conference with the theme: "Fostering innovative cross-border financing solutions in Africa."

According to him, over the years, cross border financing across Sub-Saharan Africa played a limited role in effectively addressing the funding gap across key economic sectors in the continent.

He explained that foreign direct investment (FDI) flows from China surged from $0.5 billion in 2003 to $43billion in 2017, while France, Netherland, the United States (US), and the United Kingdom (UK) remained the largest investor economies in Africa with over $60billion investment each as at 2017.

Ashade noted that more recently, the socio-economic impacts of the globally devastating COVID-19 has further exposed the vulnerabilities of the region as it continues to grapple with infrastructure development challenges compounded by capital flight to safer havens to mention a few.

"Obviously, this begs for innovative home-grown financing solutions to help strengthen Africa's economic resilience and perhaps, propel the continent through a new phase of growth. For us at United Capital Plc, we are contributing our quota as a responsible financial institution and reputable capital market operator by creating platforms such as this, where our distinguished panelists, comprising of the continent's finest professionals, can proffer insights from their wealth of experience on how to change this narrative," he said.

In his contribution, the Chief Executive Officer, United Bank for Africa, Benin Republic, Mr. Gbenga Makinde, said: "We need to look inwards to solve our problems and have currencies we can use to finance the challenges we have within."

Also speaking, Director, African Development Bank, Wale Shonibare, said: "We have to improve cross-border trade and also build regional interconnections; we also need to embrace one currency."

On his part, CEO, Ghana Investment Promotion Centre, Mr. Yofi Grant, said lack of capital goes with poor institutional growth and because most of our companies start from a micro-space so it becomes difficult to make big leaps, hence we need great thinkers who are willing to look inwards.

"Having different currencies within Africa is indeed a barrier and it is one of the critical things we need to look at. I should be able to trade in Nigeria with one currency because it is just one hour away," Grant said.

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