By Amaechi Ogbonna
On January 1, 2021 when the African Union guided by the Afreximbank’s template, flagged off the African Continental Free Trade Area Agreement (AfCFTA), one key question that agitated most minds was the state of Nigeria’s preparedness going into a market with a GDP networth of over $4trillion, serving an estimated 1.3billion people.
The major areas of concern were the country’s key economic infrastructure, including power, currency of exchange, transportation and haulage/logistics as well as other financial services.
Many stakeholders were indeed overly apprehensive that Nigeria might end up playing on the fringe of a market where several outsiders like China, the European Union and the United States of America have already positioned themselves to take more than a passive interest.
It however took a recent clarification by Mr Francis Anatogu, the Senior Special Assistant President Muhammadu Buhari on Public Sector Matters and Secretary National Action Committee on AfCFTA, to quickly doused the misgivings the concern had created in certain quarters.
According to the presidential Aide, Nigeria is ready for business with respect to the AfCFTA, with the financial services sector as one area the country already has enormous competitive advantage in Africa going into the deal.
Also re-echoing the nation’s readiness for the continental trading bloc during a recent officil visit to The Sun, President of the Manufacturers Association of Nigeria, (MAN) Dr Mansur Ahmed, admitted that the country was ready for AfCFTA.
It is on the basis of that reassurance that one can begin to appreciate the market expansion of some Nigerian banks across sub-Saharan Africa’s amidst the negative impact of the COVID-19 pandemic on business.
For the Group Managing Director/CEO of Access Bank Plc, Mr. Herbert Wigwe, the target is to be in 22 African countries over the next years through a combination of organic and inorganic strategies.
At the last count, Access Bank has made inroads into Zambia, Kenya and Southern Africa and Congo DR among others, even as it continues pushing for more opportunities guided by expected opportunities in the AfCFTA.
For Wigwe, the overriding objective is to provide seamless financial and payment infrastructure to a wider spectrum of African business community to help the country gain stronger foothold on African continental trading bloc. With growing pace of ICT in Africa, the Access Bank boss believes Nigeria can earn huge foreign currency revenues by providing quality payment, clearing and other financial services tothe rest of Africa in new AfCFTA dispensation.
Available statistics show that despite their close proximity to one another, African countries do far less business among themselves (less than 3%) than they do with the rest of the world, which explains why the Herbert Wigwe -led bank’s pan African continental growth trajectory cannot be taken for granted.
For instance, just recently, the Access Bank boss was recognised as the ‘African Banker of the Year’ at the 2021 edition of the African Banker Awards.
As winner of one of the most prized categories at the awards ceremony for a second consecutive year, Wigwe was recognised for his aggressive expansion of the Access Bank brand on the continent.
In coming up with their decision, the organisers said the enigmatic banker had amid the COVID-19 pandemic taken his bank to set up its South Africa operations, a critical financial hub on the continent following its acquisition of Grobank.
Access Bank Plc, a full service commercial bank operating through a network of more than 600 branches and service outlets, spanning three continents, 12 countries and 36 million customers currently over US$18.82 billion+ (NGN:7.28 trillion) (Q1:2020) in assets. It is unarguably one the leading brands that would make Nigeria’s presence felt in discussions on AfCFTA anywhere in Africa and across the world.
In 2018, Access Bank Nigeria, which accounts for approximately 75 percent of the groups assets, merged with Diamond Bank, then struggling to maintain regulatory capital ratios. With the process completed in March 2019, Access Bank thus became the largest in Nigeria and Africa by customer base.
But Wigwe is not resting his oars but has committed to breaking the iron ceiling, insisting that Access Bank would continue with its trajectory of promoting corporate discipline, by being in key markets on the continent, building a payment gateway and providing trade finance support to its customers.
“We want to be seen as the best bank supporting the African Continental Free Trade Area agreement (AfCFTA). In terms of diaspora remittances, we are present in key areas on the continent,” he said.
The African Banker Awards is among the most respected and recognised industry events celebrating African banking achievements.
The organisers this year, put emphasis on recognising and rewarding institutions that have contributed to the real economy after the shocks of COVID-19 pandemic.
Access bank’s W Initiative has also been recognised across the continent for contributing to women empowerment.
At the 2021 award event, Group Publisher of African Banker and Chair of the Awards Committee, Omar Ben Yedder said, “Herbert is one of the most respected bankers on the continent, without a shadow of a doubt.
“The bank has gone from a lower ranked Nigerian bank when he joined the group as Deputy CEO to become one of Africa’s leading financial services groups. He has shown a relentless pursuit for growth, but has done so in a measured and calculated manner. What he and his team have done at Access Bank is nothing short of remarkable.”
Wigwe, who is also the Chairman of Body of Banks’ Chief Executive Officers, has assured he would deploy his wealth of experience to support the industry regulators in designing initiatives to support Nigerians and banking industry sustain stability in the market.
This commitment was recently demonstrated when in a virtual press conference alongside five other bank chiefs he reassured Nigerians and the business community that the commercial banks were well positioned to meet the nation’s retail foreign exchange needs after the central bank suspended its weekly handout to Bureau de Change operators.
Decisions and agreements reached at that meeting have since led to the speedy implementation of the Central Bank of Nigeria (CBN) directive to banks to set up payment points for retail forex customers.
Wigwe is also positioning the bank to take advantage of the opportunities which the AfCFTA presents in the continent. However, with is important is for other stakeholders to realise that even as Wigwe is the continental economic bloc with banking and payment services made in Nigeria, there are still limitless business opportunities yet to be tapped into which is why Nigerians are expecting other service providers to log in now that there are still some low hanging fruits through this trading bloc.
Nigerians banks need to do more in other sectors of the economy that are still lagging behind on AfCFTA by giving financial support they need to compete on the continental and global stage.
But achieving its full potential will depend largely on putting in place significant policy reforms and trade facilitation measures that would empower businesses to remain competitive at all times
In fact, it is expected that full implementation of AfCFTA would reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.
These opportunities will provide competition within the industry and therefore banks that position themselves appropriately, will benefit enormously.
To prove it was not yet done with continental expansion, Wigwe recently met with the Rwanda president, Paul Kagame, to explore opportunities for further continental expansion to more African countries as part of efforts to support trade and finance on the continent to take advantage of the AfCFTA.
There are opportunities for Access Bank to expand to other African markets with huge potential leveraging the nascent AfCFTA and its boss is not taking any thing for granted in the bid to sustain its leadership position in african financial nmarket.
He said AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa.
He stated that the plan is for the bank to establish its presence in 22 African countries so as to diversify its earnings and take advantage of growth opportunities in the continent.
“We believe that we are best positioned to basically do all of that. Our focus is to become an aggregator in Africa and we build a global payment gateway and providing trade finance support and correspondent banking services across the continent. We are focusing on the key markets.
As we do this, we are working with our friends and partners. “We are diversifying our earnings away from volatile markets as well and we are orchestrating our operations from the global payments gateway and ensuring that using Access Bank UK, providing corresponding services from digital platforms, the overall profitability of our franchise,” he explained.
Leveraging the Diamond bank franchise, Wigwe has built a brand visibility that would be difficult to upstage if its growth strategies are sustained at current tempo.
For instance, in the wake of the pandemic, the Wigwe-led Access Bank had unfolded various forms of support for operators of such businesses, through the $50 million loan support the bank secured from the International Finance Corporation (IFC).
Wigwe, had said the bank was committed to helping Nigerian businesses weather COVID-19 pandemic and set a course for recovery.
At the Annual General Meeting (AGM) in Lagos, directors of the bank assured it has been well-positioned for sustained growth and better returns, and that shareholders will continue to see higher dividends in the years ahead.
The assurance came as shareholders approved payment of a final dividend of 55 kobo, in addition to an interim dividend of 25 kobo, bringing total dividend per share for the 2020 business year to 80 kobo. In the audited report and accounts for the year ended December 31, 2020, Access Bank had grown net profit by 13 per cent to N106 billion in 2020 as against N94 billion recorded in 2019.
The assurance also came on the heels of the release of the first quarter results of the bank for the period ended March 31, 2021, showing considerable growths across all key performance indicators.
Key performance indicators in the first quarter report for the period ended March 31, 2021 showed that Access Bank grew its top-line to N222.1 billion in first quarter 2021 as against N209.8 billion recorded in comparable period of 2020. Net interest income had risen by 30 per cent from N72.12 billion in first quarter 2020 to N93.96 billion in first quarter 2021. Non-interest income also inched up from N77.93 billion to N78.34 billion. Profit before tax rose by 30 per cent from N46.2 billion to N60.1 billion while profit after tax increased from N40.9 billion to N52.6 billion.
The balance sheet of the group remained strong with total assets rising from N8.68 trillion in December 2020 to NN9.05 trillion in March 2021. Net loans and advances totaled also improved from N3.61 trillion in December 2020 to N3.64 trillion in March 2021. The bank continued to improve its credit risk management with the proportion of non-performing loans dropping from 4.3 per cent in December 2020 to 4.0 per cent in March 2021.
The report further showed that the group retail banking business recorded steady growth with a 112 per cent increase in revenue to N57.5 billion in first quarter 20121 as against N27.1 billion in first quarter 2020. There were 941,631 new customers signed-on through the bank’s financial inclusion drive during the quarter. The improvement was also evidenced by the consistent and robust savings account growth to N1.36 trillion within the three-month period, which led to a significant reduction in cost of funds.
With the increased adoption of its digital channels and the growing customer base, the bank recorded a 29 per cent growth in USSD Transaction value and 40 per cent increase in mobile and internet banking transaction value.
Addressing shareholders at the meeting, Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, said with the position of the bank in the financial services industry, it has been well-positioned to achieve significant growth in profitability and pay higher dividend over the years.
He outlined that the bank healthy capital adequacy ratio, a robust balance sheet and strong brand that would lead to a better performance in the years ahead.