British government moves to increase UK-Nigeria trade
In a bid to further support trade and investment between the United Kingdom and Nigeria, the UK government has said it would now be able to support finance in Naira to Nigerian projects from the UK.
This is coming through its Export Credit Agency, UK Export Finance (UKEF), which helps UK companies to provide buyers overseas with competitive long-term financing for projects that support bilateral trade.
This local currency financing structure follows the same format as a conventional buyer credit in sterling or any other currency, except that Nigerian businesses buying British goods or services and taking a loan in Naira from a bank in Nigeria could benefit from a UK Government-backed guarantee.
It could also enable businesses to manage foreign exchange risks and to negotiate better terms with local banks.
British High Commissioner to Nigeria, Paul Arkwright, said: “This is a clear indication of how much value the UK places on its relationship with Nigeria. It will provide a firm foundation for a significant increase in trade and investment between both countries.
“The UK believes that no one intending to transact with British businesses should be hindered by lack of financing. By allowing Nigerian businesses easier access to world-class goods and services, we are supporting both the Nigerian and the British economy”
Head, Department for International Trade (DIT), Nigeria, Ben Ainsley, noted: “We are excited to be able to offer Nigeria and British businesses the opportunity to enter trade arrangements that are financially feasible for both sides.
“This was a key issue raised by members of the local business community when the Trade Envoy was here last November. We listed and took this feedback to London. DIT is ready to work with Nigerian businesses to identify potential trade partners across the market.”
UKEF provides a range of innovative and flexible products, providing up to 85 per cent funding for projects containing a minimum of 20 per cent UK content. The development makes the Naira one of only three West African currencies on UKEF’s pre-approved currencies list.
The move will help Nigerian businesses finance projects and source quality products and services from the UK thereby stimulating the economy. Requests will be assessed on a case-by-case basis through the UK Department for International Trade, Nigeria and UKEF in London.
Interested clients are encouraged to contact the UK DIT in Nigeria for guidance.
The DIT is a United Kingdom government department responsible for striking and extending trade agreements between the United Kingdom and non-EU states.
Its purpose is to develop, coordinate and deliver a new trade policy for the UK, including preparing for and negotiating free trade agreements and market access deals with non-EU countries. The new department is a specialised body with significant new trade negotiating capacity.
UK Export Finance is the operating name of the Export Credits Guarantee Department (ECGD), the United Kingdom’s export credit agency and a ministerial department of the UK government.