Some financial experts on Monday said that the exit of HSBC and UBS global banks from Nigeria would lead to drop in Foreign Direct Investments (FDIs).
They said this in an interview with the News Agency of Nigeria (NAN) in Lagos, while reacting to HSBC and UBS exit from Nigeria.
The Central Bank of Nigeria (CBN) said in a new report that two representative offices of the foreign banks in Nigeria (HSBC and UBS) had been closed and the closure brings the number of representative offices of foreign banks to eight as at the end of June 2018.
The CBN did not give reasons for the closure of HSBC Representative Office (Nigeria) Limited and UBS (Nigeria) Representative Office Limited, both located in Lagos.
The CBN said FDIs in Nigeria fell to N379.84 billion (1.2 billion dollars) in the first half of the year from N532.63 billion (1.7 billion dollars) in 2017, but the outlook for the Nigerian economy in the second half was “optimistic’’ given higher oil prices and production, adding that rising foreign debt and uncertainty surrounding the 2019 presidential election was a drawback.
Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi said that the obvious implication of the closure would be loss of jobs and a drop in foreign investments in view of their multinational status.
“But I do not think this would be significant considering that what these companies established here are representative offices,’’ he said.
Uwaleke said that the global banks exit from Nigeria had little to do with unfavorable business climate.
“I understand the development is not unconnected with negative stories about the country published by these international firms. HSBC in particular offered criticisms on the economy that were anything but constructive even going to the extent of positing that President Buhari would lose in the 2019 election,’’ Uwaleke said.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that the impact of the global banks closure would be minimal considering their workforce.
Omordion, however, said that government needed to provide friendly operating environment that would boost local participation and strengthen the real sector.
It would be recalled that in July 2018, the global banking giant HSBC suggested that a second term for President Buhari risked prolonging economic stagnation for Africa’s largest economy.
In its report titled, ‘Nigeria: Papering Over The Cracks’, the global bank painted the picture of a sluggish economy amid record-high unemployment rate, pushing the number of poverty to 87 million in Africa’s populous nation.
The government dismissed the report and tagged the global bank as one of the killers of Nigeria’s economy which supported the unbridled looting of state resources by leaders.
The Presidency also asked the bank to return stolen assets allegedly hidden in its coffers.
(NAN)
