- Foreign Investment Falls as Two Global Banks Leave Nigeria
The Hongkong and Shanghai Banking Corporation (HSBC) and the United Bank of Switzerland (UBS), have closed their offices in Nigeria, according to a report released by the Central Bank of Nigeria (CBN) on Friday.
The CBN report also reveals that, the foreign direct investments in Nigeria fell from a $1.7 billion (N532.63 billion) a year ago, to a $1.2 billion (N379.84 billion) in the first half of the year.
Although the reasons for the banks closure was not given, being that UBS declined to comment and HSBC was not available at the time of filing this report, however, a HSBC research report dated July, 18, noted that a President Muhammadu Buhari second term, “raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil”.
Still, the CBN remarked that the second half of the year outlook of the Nigerian economy was ‘optimistic’, as regards to higher oil prices and production but the rising foreign indebtedness and uncertainty surrounding the upcoming 2019 presidential election were drawbacks.
Again, investors confidence in the country have been discouraged since the CBN in August ordered MTN to return part of the profits the South African originated telecommunications company sent abroad to Nigeria; $8.1 billion.
Also, the CBN pointed out, that three lenders, whose names were not mentioned, failed to meet its 30 percent liquidity ratio.
The apex bank also added that non-performing loans had earlier in June 2018 dropped to 12.4 percent, from the 15 percent a year ago.
“To further consolidate on the improvement, the Central Bank of Nigeria directed banks to intensify efforts at debt recovery, realisation of collateral for lost facilities and strengthening their risk management processes,” the report noted.