Elumelu was in Uganda last week on “President Museveni’s invite” to discuss business opportunities in the country.
“I plan to add more capital to UBA Uganda to play more support role for SMEs,” he told reporters at Entebbe State House after meeting Museveni.
Elumelu did not disclose how much money he will inject into the bank, saying he was waiting clearance from the regulator in Nigeria. Last year, UBA Uganda had a good performance with all indicators pointing to a turnaround.
Its assets increased to Shs 185.7bn, from Shs 165.6bn in 2014. Customer deposits increased to Shs 145bn, from Shs 125bn in 2014. The bad debts and operational expenditure also reduced while total income grew. Its capital is way above Bank of Uganda’s minimum requirement.
While the bank still made a loss – which dropped from Shs 4.4bn to Shs 4.3bn – Elumelu said he was optimistic about the future. In a statement, the group said its subsidiaries in Kenya and Tanzania would also receive more capital.
“UBA group recognizes the increasing importance of Africa to its growth and diversification strategy. It will further enhance the capacity of the UBA subsidiaries in financing development initiatives in the region,” the statement said.
“We are deeply committed to the markets in which we operate and have established a strong track record of supporting critical infrastructure and other development initiatives… ,” Elumelu said.
East Africa is currently undertaking huge infrastructure projects, including roads, railway, and power projects. It is an opportunity for financiers like banks to finance some of these projects or its subcontractors.
At least three Nigerian firms have applied for licenses for exploration of oil in the remaining blocs in Uganda’s Albertine sub-region. This is likely to increase the interaction between ventures in Uganda and those in Nigeria. Banks such as UBA, which is influential in West Africa, are likely to tap into cross-border transactions.
Also, the prospects of oil production in Uganda and Kenya – with all the activities associated with it – are fodder for financiers. UBA is also looking into Rwanda. Elumelu said: “It was lack of self confidence that makes people take their money out of Africa.”
“We believe that African economies have the resilience to overcome the current economic slowdown and will emerge stronger.”
Meanwhile, at least 100 Ugandans will join The Elumelu Entrepreneurship Programme (TEEP) this year, where each will receive a grant of $5,000 (Shs 16.5m) of seed capital to grow their start-ups. Most of them are in agribusiness.
Last year, at least 45 Ugandan entrepreneurs were put on the programme. After demonstrating that they can grow, they will then receive an extra $5,000 as a loan. All the money will be channelled through UBA Uganda.
TEEP, which launched in 2014, will identify and help grow 10,000 start-ups and young businesses from across Africa over the next 10 years. Elumelu said “he was impressed by the progress of the entrepreneurs that have so far joined the programme”.