Political instability affects African banks negatively —Oduoza

The outgoing Group Managing Director/Chief Executive, United Bank of Nigeria (UBA), Plc Mr Philips Oduoza, has said that volatility and instability in governance in some African countries have exposed most major banks in Africa to political risk.
Oduoza, while given a lecture on the” Emergence of a Nigerian Pan-African Bank” at the Chartered Institute of Bankers of Nigeria (CIBN) 4th valedictory lecture at the weekend, noted that resource commitment by banks to comply with new regulatory policies are not optimised due to frequent economic instability faced by each African countries through their political leaders.
In Africa, he said, there are few democratic regimes, with most under various forms of undemocratic regimes in line with global definition, pointing out that such regimes are a threat to ease of doing business.
The outgoing MD also pointed out that just 14 out of the 54 African countries recognised by the UN are practising a globally acceptable form of democracy, while others engaged in less desirable governance structures, which ranges from authoritarian to transient government due to conflicts.
According to him, such governance situations pose the most visible threats to suitable and viable business environments. He also mentioned that the political instability has made it very difficult for banks to maintain a collective standardised approach to the management of Africa banks.
Oduoza, however, stressed that in recent time, there have been ample opportunities for African banks to diversify its banking business and therefore ensure sustainable revenues regardless of the political and economic challenges.
He said that Africa presents set of opportunities to the financial institutions, which include; diversified banking model, larger customer base, exploiting trade opportunities, deepening financial inclusion and retail banking and efficient letter of credit processing with good economic scale.
He was, therefore, optimistic that African dream will wax stronger as things are put in shape.