Fresh Panic Over Nigeria’s Economy as Two Banks Pack up

By Dipo Olowookere

A new fear over the state of Nigerian economy has been activated with news of two global financial institutions closing down their offices in the country.

The two affected banks are HSBC and UBS, according to the Central Bank of Nigeria (CBN) in a report released on Friday.

“Following the divestment by the Diamond Bank Nigeria Plc from the Diamond Bank UK Limited, the number of approved foreign subsidiaries of Nigerian banks fell to 54 in the first half of 2018, from 55 at end-December 2017.

“The number of representative offices of Nigerian banks abroad remain unchanged at six, while, the two representative offices of foreign banks in Nigeria (HSBC and UBS) were closed, bringing the number of representative offices of foreign banks to eight at end-June 2018,” the apex bank said in the report obtained by Business Post.

Recall that in a report released in July 2018, HSBC warned that if President Muhammadu Buhari wins the 2019 presidential election for a second term in office, the economy would suffer for it.

According to the lender in the report, a second term for Mr Buhari “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.”

The 2019 general elections in Nigeria have been causing panic among foreign investors, who are not certain of what the outcome might be, forcing them to pull out their funds from the country.

Ahead of the 2015 polls, the present ruling All Progressives Congress (APC), then an opposition party, promised Nigerians change if voted into office. This made Nigerians to boot out the Peoples Democratic Party (PDP).

But since taking over power, some citizens have expressed their displeasure with the ruling party especially over the state of the economy, which slipped into recession in August 2016.

After exiting recession a year later, there are fresh fears that the country may be heading to another economic crisis.