VZCZCXRO2576
RR RUEHMA RUEHPA
DE RUEHOS #0752/01 3251504
ZNR UUUUU ZZH
R 211504Z NOV 07
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 9605
INFO RUEHUJA/AMEMBASSY ABUJA 9357
RUEHSA/AMEMBASSY PRETORIA 1551
RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS SECTION 01 OF 02 LAGOS 000752 
 
SIPDIS 
 
SIPDIS 
 
PRETORIA FOR TDA DSCHUSTER 
COMMERCE FOR KBURRESS 
ENERGY FOR PERSON, GAY 
TREASURY FOR DPETERS, RHALL, RABDULRAZAK 
STATE PASS USTR FOR LISER, AGAMA 
STATE PASS TRANSPORTATION FOR KSAMPLE 
STATE PASS OPIC FOR ZHAN, MSTUCKART, JEDWARDS 
STATE PASS TDA FOR EEBONG 
STATE PASS EXIM FOR JRICHTER 
STATE PASS USAID FOR NFREEMAN, GBERTOLIN 
 
E.O. 12958: N/A 
TAGS: EFIN ECON EINV ETRD PGOV PREL NI
SUBJECT: NIGERIA'S UBA PARTNERS CHINA DEVELOPMENT BANK 
 
Sensitive But Unclassified; Handle Accordingly 
 
¶1. (U) Summary: United Bank for Africa (UBA) is in partnership with 
China Development Bank (CDB) to fund Chinese investments in two 
trade zones, and in infrastructure and energy projects. UBA, which 
believes it currently has 20% of Nigeria's retail banking market, 
introduced a phone card that doubles as an ATM cash card, allowing 
the bank to begin to provide services to currently un-banked small 
entrepreneurs. End summary. 
 
CDB Deal: "Almost Infinite" Capital for Development 
--------------------------------------------- ----- 
¶2. (SBU) United Bank for Africa, (UBA) on October 31 announced it 
had signed a partnership agreement with the China Development Bank 
(CDB).  UBA Managing Director, Tony Elumelu told the Nigerian press 
that the CDB agreement gives UBA "an almost infinite amount of 
capital to execute projects". Ike Onyenokwe, UBA's Director of 
Strategy, elaborated, telling Econoffs that the agreement is a 
strategic move by CDB to support Chinese investments in Nigeria, 
especially those already planned for the Lekki and Ogun Free Trade 
Zones (FTZ). Onyenokwe noted that over twenty Chinese companies are 
planning to establish an industrial estate in the Lekki FTZ; these 
companies are likely to take off soon now that CDB has entered the 
market, he said. (Comment: The Lekki and the Ogun State FTZs, for 
which Memoranda of Understanding (MOU) between the governments of 
Nigeria and China were signed in March and July respectively, had 
seen little activity until recently.  Both FTZs broke ground in 
early November. End Comment.) UBA expects trade between the China 
and Africa to grow, which fits with UBA's plan to expand to support 
trade through its subsidiaries in Ghana, Cameroon and Uganda. UBA 
will open two representative offices in China to support Nigerian 
companies there. 
¶3. (U) The partnership will also allow the two banks to co-finance 
infrastructure and energy projects in oil and gas, power, 
telecommunications, roads and railways, solid minerals and 
agriculture. UBA's Corporate Banking and Global Markets divisions 
will lead the energy and infrastructure projects. 
UBA: 20 Percent of Banking Market 
--------------------------------- 
 
¶4. (SBU) Suzanne Iroche, Executive Director UBA Global Bank, said 
the bank's consolidated balance sheet size is over 1.5 trillion 
naira (USD 11.5 billion).  UBA controls 20% of the Nigerian retail 
banking market with over 600 branches.  UBA expanded its customer 
base and branch network by acquiring, pursuant to the Central Bank 
of Nigeria's purchase and assumption arrangement, four banks which 
had been unable to increase their capital to the requisite 25 
billion naira (USD 192 million) under the recent recapitalization 
exercise. UBA took over the fixed assets and private sector deposit 
liabilities of the defunct banks, and was able to return deposits to 
customers whose monies had been trapped since January 2006. Iroche 
said most such customers were persuaded by UBA to open UBA accounts; 
only a few withdrew their funds. UBA's risks in taking over the 
banks were mitigated by promissory notes from the government. 
 
UBA Increases Services to Middle Income Customers 
--------------------------------------------- ---- 
 
¶5. (U) Funmi Omitowoju, Chief Executive, UBA Prestige Bank (UBAPB) 
said Prestige Bank was established to effectively service middle 
income customers. Banking facilities targeted specifically at this 
segment of the market are limited, so UBAPB will expand its mortgage 
finance and consumer lending, she said. 
 
Bank Pioneers Innovative Microfinance Card 
------------------------------------------ 
 
¶6. (U) UBA is also starting Microfinance Bank to empower the average 
Nigerian entrepreneur. Omitowoju said the bank introduced the UBA 
X-Change card to create banking records for people in the informal 
sector who currently do little or no banking. The X-Change card is a 
co-branded UBA/MTN (Nigeria's top telephone company with over 40% of 
the market) ATM card and telephone air-time top-up card combined. 
The card is available to UBA and MTN customers, which gives UBA 
 
LAGOS 00000752  002 OF 002 
 
 
access to non-UBA MTN subscribers while providing MTN access to 
non-MTN UBA customers. Omitowoju, who moved from MTN to UBA to 
create the new card, said UBA anticipates the card will create a 
critical database for UBA's new microfinance bank. 
 
UBA Services Niger Delta 
------------------------ 
 
¶7. (U) On its operations in the Niger Delta, Ike Onyenokwe, said the 
bank has numerous branches in the region. It provides advisory 
services to the Niger Delta Development Commission (NDDC) on the 
optimal use of its funds, particularly with respect to 
infrastructure development. 
 
¶8. (U) This cable has been coordinated with Embassy Abuja. 
 
Hutchinson