Unlocking Africa’s economic potential by growing the continent’s trade volumes

In recent years, mergers and acquisitions (M&A) have emerged as a significant avenue for investment in Africa, attracting attention from both global and local market participants. Importantly, M&A has reshaped the banking industry’s dynamics and prompted debates on the implications for financial stability, competition and economic development. While there may be critics of M&A as it relates to consolidation, it is crucial to recognise the benefits that well-executed M&A can bring to the continent’s banking sector and economic fortunes.

Access Bank has been working tirelessly to execute our vision to be the world’s most respected African Bank. Through disciplined and carefully considered dealmaking, we have made great strides in building a strong global franchise, focused on serving as a gateway and support for investment and trade within key markets in Africa – as well as between Africa and the rest of the world – by leveraging the power of technology and a robust network of relationships across the countries in which we operate.

In the past 12 months alone, we have announced nine transactions in seven countries across the continent, including Uganda, Zambia, Angola, Tanzania, the Gambia, Sierra Leone and Cameroon. This has increased our reach and enabled us to establish operations across 14 African countries (with plans to expand to 20, in line with our 2027 strategy). While the main objective of every transaction has been to build the scale needed to become a major player in each of our markets, we continue to be guided by the belief that prosperity is cultivated through inclusive growth and economic development. The Bank has leveraged its propositions for Small and Medium Enterprises (SMEs), Women and Youth, and recognised their pivotal role as the backbone of a thriving economy. Our acquisitions, therefore, seek to enhance the capability of human capital in prospective countries, building their economic prosperity and creating positive impact in our host communities.

Our approach to M&A has also emphasised regional integration as a strategic imperative. In a continent marked by asymmetrical markets and economies, the African Development Bank (AfDB) has noted that regional economic integration is essential for Africa to realise its full growth potential, to participate in the global economy, and to share the benefits of an increasingly connected global marketplace. Having 54 individual countries, often without the physical and economic machinery to act in tandem, seriously limits this possibility. M&A is key to this integration, as it facilitates cross-border expansion, enabling banking institutions to play a significant role in fostering economic development.

The breadth of Access Bank’s operations across 20 markets globally will enable it to become Africa’s payment gateway to the world, creating a globally connected community, inspired by Africa. By building this multi-jurisdictional footprint, committing over US$680 million through greenfield initiatives and inorganic growth facilitated by targeted M&A activities, we have ensured that the continent’s most impactful customers are able to benefit from a larger combined balance sheet. Customers now also benefit from a broader international footprint – with increased access to trade finance, treasury, international payments and loans via Access Bank’s wider distribution network – and presence in the key trade corridors which connect Africa with Dubai, China, Lebanon, Paris, Mumbai, the UK and Hong Kong, as well as other key markets.

Access Bank has continued its impressive growth trajectory, both organically and by acquisition. Our most recent large-scale transaction was the acquisition of Standard Chartered Bank’s (SCB) operations across Angola, Cameroon, the Gambia and Sierra Leone, and its Consumer, Private & Business Banking business in Tanzania. Access Bank’s acquisition in these five markets aligns with its disciplined approach to expansion, representing a key step in its journey to build a strong global franchise, focused on serving as a gateway for payments, investment and trade within Africa, and between Africa and the rest of the world. Access Bank’s strategic global presence allows for enhanced cross-border transactions, correspondent banking services, and smoother remittance processes. This seamless global connectivity ensures that customers can conduct business efficiently, and access international markets with ease.

Moving further down south to Zambia, we have recently completed our acquisition of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia (Atlas Mara), after obtaining all requisite regulatory approvals. This transaction will propel the combined entity into the top five banks by revenue in the Zambian market, with prospects to be in the top three by 2027. We also expect to create a larger platform to access the COMESA banking opportunity, supporting customers within the region through the Access Bank network.

But these transactions only paint part of the picture, serving to confirm that an uptick in M&A in African banking should be viewed as a channel for investment, and a strategic move towards unlocking the continent’s immense banking potential. By fostering technological innovation, financial inclusion, regulatory compliance, regional integration, risk mitigation and international competitiveness, M&A emerges as a catalyst for sustainable economic growth and development in Africa. These advantages contribute to the industry’s adaptability, resilience, and ability to provide enhanced services to customers in an evolving economic landscape. As this transformative journey is navigated, it is imperative to recognise the long-term benefits that strategic consolidation can bring to the continent’s banking landscape, and its broader economy.

Access Bank’s vision for growth and expansion in Africa is a promising one that seeks to roll out initiatives that will further develop the African continent and, more importantly, reshape the global perception of Africa and African businesses.

Oluseyi Kumapayi is Executive Director | African Subsidiaries, Access Bank Plc

This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.

DealMakers AFRICA is a quarterly M&A publication.
www.dealmakersafrica.com