January 27, 2015 – Group Managing Director, United Bank for Africa, (UBA) Plc, Mr. Phillip Oduoza has assured investors in the Nigerian economy not to panic over falling crude oil prices and exchange rate volatility.
Oduoza who was speaking to CNBC Africa at the World Economic Forum (WEF), in Davos, Switzerland said Nigeria has enough currency in external reserve to stabilize the Naira.
The price of crude oil has fallen below $50 in the international market. But Oduoza is very optimistic that the price variations will not bring doom as many have predicted.
“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” , Oduoza said.
He explained that Nigeria faced similar challenges in 2008/2009 adding that experience learnt during the period will come in handy 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 stabilize the exchange rate and we are beginning to see some form of stability in the market,” he added.
He said that foreign investor community do not need to panic since Nigeria has no form of currency or capital restriction just as he dismissed any fears that there will 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 than defaults. So, you are unlikely to see any significant increase in non-performing assets” ,Oduoza explained.
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 two key strategic markets on the continent yet to enjoy the UBA 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 that UBA will be adequately prepared to compete in the highly competitive South African banking industry by the time the bank would move in.
“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 is one of the global banking Chief Executive Officers 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 economy through public-private cooperation in the spirit of global citizenship.
