Business
Afreximbank disburses $40 million to support Fidelity Bank’s acquisition of Union Bank UK
| Joel Ajayi |
| With this acquisition, Fidelity Bank is able to birth a new pan-African financial institution capable of providing correspondent banking and offshore banking services to banks in Africa |
| African Export-Import Bank (Afreximbank) (www.Afreximbank.com) has announced the disbursement of a US$40-million Intra-African Investment Facility to Fidelity Bank Nigeria Plc (“Fidelity”) to support Fidelity Bank’s acquisition and recapitalization of Union Bank UK as part of its international expansion programme. Provided in two tranches of US$20 million each, the first tranche of the facility enabled Fidelity to part-refinance the acquisition of 100 per cent equity stake in Union Bank UK, while the second tranche was used to support its recapitalisation via the injection of additional equity into the acquired bank, as approved by the United Kingdom’s regulator. With this acquisition, Fidelity Bank is able to birth a new pan-African financial institution capable of providing correspondent banking and offshore banking services to banks in Africa and servicing the banking needs of Africans in the diaspora. Commenting on the transaction, Kanayo Awani, Executive Vice President, Intra-African Trade Bank and Export Development Bank, Afreximbank, noted that the disbursement of the facility was part of Afreximbank’s effort to promote African control and ownership of capital while improving intra-African trade and investments. “Fidelity Bank’s acquisition of Union Bank UK aligned with Afreximbank’s Intra-African Investment Facility. It was a significant milestone for both institutions, reinforcing African ownership and control within the global financial landscape,” Mrs. Awani said. “By supporting this strategic transaction, we are not only bolstering Nigeria’s banking sector but also fostering greater financial integration between Africa and its Diaspora. This initiative is a testament to our commitment to enhancing intra-African trade, promoting economic stability and driving forward the objectives of Agenda 2063 for a prosperous and self-reliant Africa.” She added. Mrs. Awani stated that Afreximbank’s Bank Acquisition Strategy, empowers African entities to acquire financial assets divested by foreign entities in Africa and the diaspora. This is also in line with the Bank’s Diaspora Strategy which seeks to promote and finance the integration of the African Diaspora with the rest of the continent. . She noted that, through the facility, Fidelity was extending its services to the UK, in particular, to Africans and African-owned businesses in the UK, including products to support Diaspora investments. In the words of the MD/CEO of Fidelity Bank, Dr (Mrs) Nneka Onyeali-Ikpe, ‘We are very thankful to Afreximbank for supporting our expansionary initiatives for international growth. It is, indeed, the result of a strong partnership between the two institutions over the years that has produced this good outcome. The refinancing of the Union Bank (UK) acquisition by Afreximbank will unlock additional value and help create a scalable and more sustaining service franchise that will support trade businesses in Africa and diaspora banking.” The acquisition is expected to contribute to Africa’s economic growth and development by increasing intra- and extra-African trade finance and trade flows between Nigeria and the UK, supporting the integration of the African Diaspora into regional and continental supply chains and enabling small and medium-sized enterprises across the continent to improve their export competitiveness and light export manufacturing capabilities. |
Business
Economy Stabilizing and Positioning for Growth, As FG Exits Ways and Means Borrowing Mechanism
Joel Ajayi
The Federal Government has disclosed that it has made significant strides in its economic reforms, well on its way to achieving a step-change in the revenues of the Federal government; closely in line with the budget for 2024. The Federal Government also announced its exit from the Ways and Means borrowing mechanism.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun stated this today in his office in Abuja during the half-year review Ministerial Press Briefing with the theme: *Economic Recovery and Growth: Progress and Prospects 2024.
He highlighted successes of the Government’s reforms, citing a projected budget deficit of 4% in the 2024 Fiscal Year. He also acknowledged the temporary hardships caused by the reforms but assured that Nigerians would soon benefit from the expected outcomes as the well coordinated economic policies of the Federal Government are beginning to yield results as shown in the slowing in the rate of growth of inflation, increasing foreign investments relative to the same period in the previous year, amongst other positive fiscal yardsticks that are being noted.
The Minister informed that one of the major priorities of the President Bola Ahmed Tinubu-led Administration in the immediate term is to reduce food prices and focus on providing all the necessary support to increase local food production, given the impact of high food prices on inflation. He noted that efforts are underway to achieve this goal.
Edun emphasized the President’s commitment to the welfare of ordinary Nigerians and the Government’s efforts to ensure transparency and accountability in its social protection initiatives including but not limited to the acceleration of the direct benefit transfer programme that has now been restarted following an initial pause of the programme to improve transparency in its delivery. He mentioned that, following the resumption of payments, over 600,000 households have already received this direct transfer this week.
As part of efforts to further improve foreign exchange liquidity and to showcase the resilience of the Nigerian financial system as economic stability takes root, the Minister also announced plans for the Federal Government to issue domestic USD denominated securities of up to US$500 million, in the first instance to attract investment from Diaspora Nigerians and Nigerians with savings held abroad.
Edun acknowledged the Supreme Court’s judgment on direct payment of federation allocations to Local Government Councils, and reiterated the Government’s commitment to implementing the judgement .
The Minister affirmed that with the outcome of the first half of 2024, indeed the Nigerian economy is turning the corner; and with macro-economic stability, the economy is being well positioned for sustained and inclusive growth that creates jobs, lifts millions out of poverty, and drives domestic and foreign investments that would improve the general well-being of the average Nigerian.
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