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Investors punish Nigeria for nailing SA telecoms giant MTN

EDINBURGH — Multinational banks HSBC and UBS have shut their Nigeria offices as foreign investment drops, according to news agency Bloomberg. Oil-rich Nigeria, which has Africa’s biggest economy in terms of Gross Domestic Product, has been seen as holding exciting business growth opportunities. But a $10.1bn battle between the country’s central bank and South African multinational telecoms giant MTN has wiped out investment confidence in the country. MTN is accused of illegally sending $8.1 billion abroad, and the Nigerian government has demanded $2 billion in related taxes from MTN, reports Reuters. MTN is defending the case and denies all wrongdoing. In the meantime, this fight has sent out a clear message to multinationals that investing in Nigeria is high risk. MTN has generated about one-third of its annual core profit in Nigeria in recent years. Banks like HSBC specialise in facilitating global trade for multinationals, while UBS is also known for its wealth management expertise. – Jackie Cameron

By Tope Alake

(Bloomberg) – HSBC Holdings Plc and UBS Group AG have closed their local representative offices in Nigeria, according to a report published on the website of the central bank.

HSBC UBS

The Central Bank of Nigeria didn’t specify a reason for the closure of the two banks’ local offices or identify a day when operations ended. The number of representative offices for foreign lenders fell to eight as of the end of June, according to the report.

A spokesman for HSBC in London declined to comment on the Nigeria report. A UBS official reached by telephone on Saturday had no comment.

The bank also said foreign direct investment in Nigeria fell 29 percent to 379.84 billion naira ($1 billion) in the first half of the year, from 532.63 billion naira in the same period a year earlier.

UBS has in the past said a dispute between the central bank with South African telecom company MTN Group Ltd. over repatriation of $8.1 billion may erode confidence in the country.

Nigeria’s government in September accused HSBC of money laundering after an analyst working for the lender said that a second term for President Muhammadu Buhari may stall economic recovery in Africa’s biggest oil producer.

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