The Group Managing Director and Chief Executive Officer, United Bank for Africa Plc, Mr. Phillips Oduoza, says he does not see any significant devaluation of the naira happening in the country as the country has enough external reserves to keep supporting the naira.
As a result, he urged investors in Nigeria not to panic over the falling crude oil prices and the exchange rate volatility.
A statement by the bank quoted Oduoza as saying this while speaking to CNBC Africa on the sidelines of the World Economic Forum in Davos, Switzerland.
“Investors do not have to panic. At $34bn, Nigeria has enough external reserves to support the naira. I do not see any significant devaluation of the currency happening,” Oduoza said.
He also explained that Nigeria faced similar challenges in 2008/2009 and the country had learnt a lot from that experience, which will come in handy in managing the current currency challenges.
He said, “In my opinion, the Central Bank of Nigeria 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”
According to Oduoza, the foreign investor community does not need to panic since the country has no form of currency or capital restriction.
He also dismissed 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 defaults. So, you are unlikely to see any significant increase in non-performing assets,” explained Oduoza.
Also speaking on UBA’s expansion plans across Africa, Oduoza explained that Angola and South Africa were in the expansion plans of the bank in the near future as the two countries are the only two key strategic markets on the continent that have yet to enjoy the bank’s services.
“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 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.
Source : Punchng