The Lion King | 5
GDP growth include; consumer
facing industries (retail, telecom-
munications and banking),
infrastructure related industries,
agriculture and resources. There
will also be an average of 1.1
billion Africans of working age
with 128 million Africans having
discretionary spending power,
that is, an annual income in
excess of $5000, a potential
spend of $640 billion annually.
Also by 2030, McKinsey estimate
that about 50% of Africans will
be living in cities and Africa’s top
18 cities will have a combined
income in excess of $1.3 trillion.
Other analysts are even more
optimistic. The Africa Develop-
ment Bank (AfDB) put the size
of Africa’s middle class at 350
million in 2010; with an average
spend of $2 to $4 a day. Also
Renaissance Capital estimate
Africa’s GDP to hits $29 trillion “in
today’s money” by 2050 in their
book “the fastest billion.”
This is the African growth story
that has set the retail and
consumer banking space on fire
in the African financial sector.
With increased discretionary
spending power in the hands of
many more Africans in future,
banks will play a key role in
providing savings outlet for these
funds as well as financing the
consumption habits of the newly
affluent Africans.
Richer Africans will need to save
and borrow to buy non-essential
goods like Flat panel Televisions
and other modern electronic
gadgets; they will need mortgag-
es and also splash on the latest
cars and modern accessories.
Banks will have to create the
platform for these newly rich
Africans to meet this need.
The newly affluent are potential
sources of stable and cheaper
funding for banks. Banks will
depend on the stability of retail
deposits to extend long term
financing like mortgages and
infrastructure loans and short to
medium term finance to support
middle class consumption.
United Bank for Africa (UBA)
Plc, has already studied the
emerging trend across Africa
and positioned its business to
take advantage of the emerg-
ing economic boom on the
continent.
Initial steps have been built
around the positioning of subsidi-
aries in key countries on the
continent. UBA’s presence in 19
African countries, which control
a large chunk of the African
economy, has positioned it to
tap into the emerging boom in
Africa’s consumer market in a
more affluent African economy.
UBA’s presence in key African
economies has been comple-
mented with the development
and introduction of an array
of retail products. The retail
products portfolio cuts across
social strata and is adaptable to
specific countries of operations
increasing its acceptance and
sales across different countries.
If and when the newly afflu-
ent customers require savings
products, UBA has an array of
flexible savings products on
offer. For example, there is the
Lion Prime Savings Accounts,
comprising a series of savings
products designed to meet
the unique needs of different
customers. There is the Ruby
Account, specially designed to
meet the unique needs of the
woman of distinction. To encour-
age financial inclusion, and
bring on board Africans outside
the financial system, there is the
Freedom Savings Account, a low
documentation account for the
unbanked.
Development in technology
has however created a thin
line between consumer and
e-banking and UBA has invested
in a robust e-banking platform
that ensures the smooth transi-
tion of all of the bank’s customers
into the e-banking space. Retail
customers are on-boarded into
an e-banking platform that deliv-
ers convenient banking almost
instantly to all of the bank’s
customers, enabling them to
carry out their banking transac-
tion on their phones, tablets or
personal computers without
having to visit any of the bank’s
brick and mortar business offices.
UBA’s array of e-banking
products for its retail customers
include; U-Mobile, which enables
convenient financial services
to be done on a phone and
U-Direct, which enables retail
customers to carry out conveni-
ent banking services on their
tablets and personal computers.
UBA has also invested in products
for companies with huge retail
end users. These include BankC-
ollect platform, Schools On-line,
E-dividend and POS with multi-
ple collections and payments
interface between businesses
and retail end of transactional
activities.
All of the bank’s retail custom-
ers enjoy access to the bank’s
locally and internationally issued
payment cards which include;
MasterCard, Visa, Verve, and
Visa issued Prepaid Cards.
On the credit side, UBA’s personal
loans and consumer loans are
available in different countries to
create a stream of funds for the
newly affluent Africans to acquire
the products that fit their affluent
life-style.
For UBA, positioning for the
emerging affluent African is a
must because of the huge poten-
tial. By 2040, one in five of the
world’s young people, will be
an African and Africa will have
the world’s largest working age
population.
Africa still has about 40% of the
planet’s gold reserves, 10% of
the world’s oil reserves and new
reserves are being discovered
every time, 80% to 90% of the
Chromium and Platinum group
metals are on African soil. Add
to these resources, the increased
economic reforms plus higher
education rates and access to
modern technology, the African
of 2020 will be considerably
better-off than the African of
today.
A well positioned bank, like UBA,
will thus have a significant market
play. Africa’s future economy
will definitely be driven by its
consumer industry, driven by
young and affluent Africans
desiring the best life can offer
globally.
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