26 January 2015, Lagos – The Group Managing Director/Chief Executive Officer, of the United Bank for Africa Plc (UBA), Mr. Phillips Oduoza has urged investors in Nigeria not to panic over falling crude oil prices and exchange rate volatility, saying the country has enough reserves to support the local currency.
Oduoza said this while speaking to CNBC Africa on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland.
“Investors do not have to panic. At $34 billion, Nigeria has enough external reserves to support the naira. I do not see any significant devaluation of the currency happening” said Oduoza.
He also explained that Nigeria faced similar challenges between 2008 and 2009, adding that the country learnt a lot from that experience. The experience learnt then, according to the UBA boss would be applied in managing the current currency challenges.
“In my opinion, the Central Bank of Nigeria (CBN) is handling the challenges very well because they have come out with tools and instruments to stabilise the exchange rate and we are beginning to see some form of stability in the market,” he added.
Oduoza stressed that foreign investor community do not need to panic since the country has no form of currency or capital restriction.
He also dismissed fears that there would be a rise in non-performing loans due to exposure of the banking industry to companies in the oil and gas sector.
“The international oil companies are very versatile and have hedged their positions for a very long time. Most of them also have foreign currency receivables.
“So, what you are likely to see is an elongation of the tenure or restructuring of these loans rather defaults. So, you are unlikely to see any significant increase in non-performing assets,” he explained.
Also speaking on UBA’s expansion plans across Africa, Oduoza explained that Angola and South Africa are in the expansion plans of the bank in the near future, adding that the two countries are the only key strategic markets on the continent yet to enjoy UBA’s unique customer experience.
“Right now, we are involved in the consolidation of operations in the 19 African countries where we have our footprints. Our expansion to South Africa and Angola, will come much later.” Oduoza said.
He said UBA would be adequately prepared to compete in the highly competitive South African banking industry by the time its ready to enter the market.
“There is a significant level of trade flow between Nigeria and South Africa which has been on the increase. We are uniquely positioned to play in that segment of the market,” Oduoza said.
Oduoza was one of the global banking CEOs invited to be part of the WEF in Davos, Switzerland to discuss issues affecting global economic development.
The forum is committed to improving the state of the world through public-private cooperation in the spirit of global citizenship. It engages with business, political, academic and other leaders of society to shape global, regional and industry agenda.
– This Day