While speaking to CNBC Africa on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland, 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.
“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” he said.
According to This Day, 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.
Oduoza also stressed that the 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.