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United Bank for Africa and British International Investment, the UK's development finance institution, have signed a letter of intent to develop trade finance collaboration across Africa, targeting what the African Development Bank estimates is an $80 billion annual gap in the continent's access to trade and working capital facilities.
The agreement was signed in London on March 16 between UBA UK, the London subsidiary of UBA Group, and BII, which manages a portfolio of investments across more than 66 countries with total net assets of £9.87 billion. The two institutions said the proposed initiative would focus on expanding access to letters of credit, guarantees and supply chain finance for businesses operating across Africa, particularly small and medium-sized enterprises that are frequently shut out of commercially viable terms.
The trade finance shortfall is one of the more stubborn structural problems in African commerce. Without reliable access to instruments that underpin cross-border transactions, businesses across the continent struggle to export and import competitively, regardless of how productive they are domestically.
Under the proposed arrangement, UBA UK would use its position within the broader UBA Group's 20-country African network to originate and structure trade finance transactions. BII would then support deals that might otherwise fall outside the appetite of conventional commercial lenders, using its development mandate to take on risk in markets where private capital typically does not go.
"UBA UK is uniquely positioned to connect African businesses with the international financial system," said Lok Mishra, chief executive of UBA UK. "Working alongside BII, we can extend that capability further, mobilising capital where it matters most and helping to close the trade finance gap that holds back so much African potential."
Chris Chijiuitomi, BII's managing director and head of Africa, said trade finance is a critical enabler of private sector growth on the continent. "We welcome the opportunity to collaborate with UBA Group, whose pan-African network and deep institutional relationships can help advance our ambition to expand access to trade and working capital finance, particularly in frontier markets," he said.
Both institutions identified the African Continental Free Trade Area as a priority catalyst for the planned facility. AfCFTA entered into force in 2021 and represents one of the most significant trade integration initiatives anywhere in the world. UBA UK's presence across major AfCFTA economies puts it in a position to support businesses navigating the emerging continental trading bloc, which has yet to fully operationalise the financial infrastructure needed to make intra-African trade flow at scale.
UBA Group, chaired by Nigerian billionaire Tony Elumelu, employs roughly 25,000 people across its network and serves more than 45 million customers. Beyond its 20 African markets, the group operates in the United Kingdom, United States, France and the United Arab Emirates. UBA UK serves as the group's hub for trade operations, handling trade finance, treasury and correspondent banking for institutional and corporate clients.
BII has committed that at least 30 percent of its total new commitments between 2022 and 2026 will go toward climate finance. The institution is also a founding member of the 2X Challenge, a global initiative that has raised more than $33.6 billion to support women's economic development.
Both parties said the initiative remains subject to further assessment, due diligence and internal approvals before any formal facility is established.
