United Bank for Africa (UBA) is looking to invest around 2.2 million dollars into the Nigerian infrastructure projects after concerns about the spread of Ebola halted the bank’s plans for regional expansion.
Phillips Oduoza, CEO United Bank for Africa, stated this while speaking with Bloomberg Tv Africa at the World Economic Forum in Davos-Klosters, Switzerland.
Oduoza, said, in Nigeria for instance, UBA is significantly involved in the financing of the power assets during the prioritization of the power assets.
He said, “We are also involved in the infrastructure of our roads as well. We are involved in power across other African countries and for us it is where to go to. And, I believe that the democracy has come to stay in Africa so we have a lot of confidence. Again, we did not stop expansion due to Ebola.
“We are present currently in 19 African countries and these are the most strategic markets, probably with the exception of Angola and South Africa, which we are going to take on in the next phase of expansion. For us, Ebola, I think the worst is over because all the countries are beginning to show very positive signs of recovery so we don’t have any issues with that. We are currently at a consolidation phase of our banking activities.
Asked about the bank’s experience since the outbreak of Ebola in part of West Africa, he said that neither of subsidiaries nor offices was closed.
The UBA Boss told Bloomberg Tv Africa that “No subsidiaries and no office were closed and for us, our objective across Africa is to partner with the various African governments in the economic development of the various countries and so when the Ebola outbreak came into existence in these three countries, we stayed and supported the country. It is quite amazing that as we speak right now, no single staff of UBA was actually affected.
“We started with sensitization, we looked at various points of contact and we tried to minimize contacts. We got gloves for our people, we got facemasks and we got sanitizers and we embarked on enlightenment campaign with our customers. So far I think the worst is over.
Sharing his view on the weakness in the Naira and the drop in the oil price going to impact expansion plans (by the bank) and others going forward, he said, “Well, that is a concern for everybody, the reason being that Nigeria is dependent on oil. Whenever the oil price goes down, you find out the revenues coming to the government also goes down and you find that by extension other businesses. But I do not think it is bad where we are right now”.
“The reason being that Nigeria still has as much as about thirty five billion dollars in reserves and this can be used to actually protect the Naira, as we see it. We also do not think that the oil price is going to move down significantly from where it is right now. Secondly, we do not see this situation as one that is going to last for a very, very long time because we have seen it happen in the past, in 2008 we saw that and then it came to pass. I think it is a cycle that we go through once in a while but we are adequately protected. The risks are good. There is no problem, especially if we have financed the upstream oil and gas. What it will entail is elongating the tenure of the loans and the payment period and I don’t see any NPL (Non performing loans) arising from this”.
Asked if the Bank will pull back from investing in oil and gas sector due to the pressure on the market, Oduoza said, “The investment in the oil and gas, especially upstream sector is a long-term investment and is one for which the cash flow is over a very long period of time.
“We will actually continue to finance oil and gas because we believe that the situation we have right now is a temporary one it’s not going to last for a very, very long period of time we have seen it happen before it is cyclical in nature and we are going to recover very soon”.