The African Continental Free Trade Agreement (AfCFTA) provides $504.17 billion African goods and $162 billion services opportunities to banks and other companies within the continent. With investments in technology, Access Bank has fortified its operations to support businesses and integrate payments for participants in the AfCFTA. Access Corporation’s Chief Executive Officer, Herbert Wigwe, says the conglomerate’s transition into a full financial services holding company and wide network coverage will be harnessed to drive Africa’s payment options for sustainable economic growth. Assistant Business Editor COLLINS NWEZE reports
Discussions around African Continental Free Trade Agreement (AfCFTA) are getting louder by the day. From Lagos, Nairobi, Accra, Freetown to Cape Town, and other cities across the continent, there is huge awareness about the $3 trillion trade opportunities in AfCFTA and how they will impact African economies.
For many financial institutions, AfCFTA represents hope for Africa, and the long-awaited opportunity to connect every African in the businesses world through digital payment. The AfCFTA is the largest trade pact to take effect since the establishment of the World Trade Organisation, covering more than a billion people across the African continent.
Access Bank is one of the banks that saw early the e-payment opportunities in AfCFTA and has not only expanded its operations to harness them through investments in technology, but has expanded its footprints in Africa and other critical regions globally. For Access Holdings Plc, trading as Access Corporation and led by Herbert Wigwe, technology is redefining and simplifying banking.
It has also brought banking to the doorsteps of almost every household. For instance, the opening and operating of accounts can now be done without visiting a bank or physically interacting with human beings and from the comfort of one’s office, bedroom or even while in transit.
Technology has revolutionised banking and every individual now has the capacity to have their banks with them everywhere and in their pockets. These are the benefits the financial institution is tapping with its massive investment in technology. Wigwe has also deployed impeccable professionalism, discipline and persistence in leading the change in the traditional narrative of the banking sector in Nigeria and the continent. From deep understanding of compliance issues and the need to use the right technology infrastructure to support payments and remittances without taking incremental risks, Wigwe has taken the banking giant to the next level.
He said: “The bank will go forward, focus on becoming an aggregator in Africa as we build a global payment gateway, provide trade finance support, and correspondent banking across Africa’s key markets. We are diversifying our earnings away from volatile markets and orchestrating operations from the global payments gateway.”
Wigwe had said across Africa, there were opportunities for the bank to expand to high-potential markets, leveraging the benefits of the AfCFTA. He had said AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa.
Wigwe is not the only one voicing support for AfCFTA. Speaking at the African Continental Free Trade Agreement (AfCFTA) conference in Dar Es Salaam, the United Republic of Tanzania, Liberian Vice President, Jewel Howard-Taylor, emphasised the compelling need for a hands-on approach and collaboration necessary to ensure the actualisation and subsequent transformation of the lives of the largest segment of Africa’s population, the women and youth. She further argued that besides trade, the success of AfCFTA will also be assessed on its impact on how it improved the development trajectory of the African continent through improved access to credit.
Exploring AfCFTA advantage
A crucial arena the Access HoldCo seems very focused in its quest for offering of trade facilitation services to its African business community is the use of an efficient payment and settlement design being developed to power transactions in the AfCFTA, which commenced with about 52 countries already aboard.
The emerging consensus is that Africa still trails Europe, Asia and the United States, among other regions, in its continental trade below 10 per cent of global trade. For example, over the past 50 years, records show that while trade with the West comes with very few or zero bottlenecks, intra-African trade are usually mitigated by so much tariff and non-tariff barriers, including payment challenges, which an Access HoldCo can leverage to extend its reach across Africa and beyond in the years ahead.
According to the African Development Bank (AfDB), intra-Africa exports amount to only 16.6 per cent of total trade in the continent. But the signing of the landmark trade agreement in the African Continental Free Trade Area Agreement (AfCFTA) in 2018, which commits countries to remove tariffs on 90 per cent of goods, progressively liberalise trade in services and address a host of other non-tariff barriers, opened a new vista for Nigerian and other lenders in Africa to become more competitive.
Though much work still needs to be done, the agreement created a single African market of over a billion consumers with a total Gross Domestic Product (GDP) of over $3 trillion, which would make Africa the largest free trade area in the world. Fundamentally, this means that any lender with relevant structures can leverage payment and settlement opportunities in the continental space to make more impact.
The need to formalise Africa’s trade opportunities led to the implementation of the AfCFTA, which also comes with opportunities. The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said the AfCFTA, when fully implemented, could afford Nigerian companies preferential access to African markets worth $504.17 billion in goods.
Over the last few years, Access Bank has been on an aggressive expansion journey. From expanding its footprints nationally, the Nigerian bank has been strategically planting branches across Africa and establishing presence in countries thousands of miles from its headquarters, to take advantage of the widening opportunities on the continent. One of such ventures by Access Bank was its announcement on the Nigerian Exchange Limited (NGX) that it had acquired 78.15 per cent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).
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Access Bank has subsidiaries across Sub-Saharan Africa and Europe, providing financial and banking services. They include Access Bank (Gambia) Limited, Access Bank (Sierra Leone) Limited, Access Bank (Zambia) Limited, Access Bank (UK) Limited, Access Bank (Ghana) Limited, Access Bank (D.R. Congo), Access Bank (Rwanda) Limited, Access Bank (Guinea) Limited, Access Bank (Kenya) Limited and Access Bank (Mozambique) Limited.
Next decades of leadership
After over 20 years in operation, and now a HoldCo, analysts said the next 20 years under Wigwe’s leadership will be very exciting for Access Bank. They see the bank landing in New York, Paris and many other places in the Northern Hemisphere and urged it to continue to support the underprivileged members of the society in its corporate social responsibility programmes and the aspirations of the government in making African economy more diversified and productive.
Speaking on the Corporation’s debut, an upbeat Wigwe, who is the Group Chief Executive Officer of Access Corporation, said: “Many of you would have heard us talk about Access Corporation earlier this year. This natural evolution of our company will ensure that we continue to use digital tools and our partnership with Fintechs to support our customers’ lifestyles outside of the banking system.
“We have set our sights on and delivered ambitious plans to transform the African financial services sector over the last 20 years. Until now, we have concentrated on banking, with the goal of becoming the World’s Most Respected African Bank.
“Our banking subsidiary is Nigeria’s largest bank by assets and Africa’s largest in terms of customer base. It is now time for us to take the next transformative step, where we provide our customers with beyond banking services delivering new interconnected financial services across customers’ needs.”
For the lending company, the focus is largely on consumer lending, serving individuals and small and medium scale enterprises. Products on offer include buy-now-pay-later loans, car loans, small mortgages, salary-based loans, working capital loans, durable goods loans, point of sale loans and much more. This is a digital business, focused on speed, convenience and value. On the other hand, the Group’s Payment Company will drive payments locally and across the African continent and beyond. Primarily, a business services company, the Payco will make payments simpler, faster and more efficiently. The focus will be on switching, card processing, new and emerging payments.
There is more. An Access HoldCo structure, for the nimble Wigwe, means they now have the leeway to branch out into other financial services outside its core banking operations to recompense for a largely depressed earnings capacity of commercial banking in consonance with the sector’s growing propensity to diversify income streams of operators in an enlarged entity.
Effectively, the HoldCo franchise allows a parent company to hold controlling stakes in the subsidiaries under its purview without interference in their functioning, while freeing each of the companies in the group from the liability or debt settlement obligations of another company in the event of insolvency.
Perhaps not surprising Access Holdings’ exploited its Afrocentric leaning and opened up branches in major financial centres of the world to enable it focus more on improving trade on the continent and earn more revenue for its shareholders. An alert, sure-footed leader, Wigwe noted: “We recognise and embrace the change that is currently happening and, as we have previously demonstrated, we will lead. Access Corporation will be a driving force in the ongoing digital revolution to the benefit of our stakeholders.
“This transition will allow us to offer more career development opportunities across portfolio companies for our employees, allowing us to attract and retain the best talent in an increasingly global marketplace. We will unlock more value for our customers by focusing on distinct business opportunities with high growth rates globally, such as payments and consumer lending.”
Looking ahead
Access Corporation said it will continue to provide services in health, housing, digital, mobility content, mobility, core banking offerings, and other financial services such as insurance and wealth management. Wigwe said: “We recognise and embrace the change that is currently happening and, as we have previously demonstrated, we will lead. Access Corporation will be a driving force in the ongoing digital revolution to the benefit of our stakeholders. This transition will allow us to offer more career development opportunities across portfolio companies for our employees, allowing us to attract and retain the best talent in an increasingly global marketplace. We will unlock more value for our customers by focusing on distinct business opportunities with high growth rates globally, such as payments and consumer lending”.