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London’s Business-Economy Offer To Nigeria

By Alderman Yarrow
10 October 2015   |   11:54 pm
MY visit to Nigeria this week comes at a crossroad moment for the economy. With a new government in place under President Muhammadu Buhari and an economy that continues to grow rapidly, at around seven per cent a year since 2009, there looks to be a new dawn appearing for one of Africa’s star performers.

LondonMY visit to Nigeria this week comes at a crossroad moment for the economy. With a new government in place under President Muhammadu Buhari and an economy that continues to grow rapidly, at around seven per cent a year since 2009, there looks to be a new dawn appearing for one of Africa’s star performers.

However, there remain a number of challenges ahead on the road to prosperity. Making sure that the country gets the most from their existing oil and gas assets is a necessity as it should be far and away the continent’s largest producer but simply can’t match its output with demand.

A diversified economy is also extremely important. Currently oil receipts generate 75 percent of government revenue, so a significant fall in the global oil price could undermine fiscal consolidation, produce faster domestic debt accumulation, increase credit risk, and undermine the stellar GDP performance we have seen.

Finally, I know that the Nigerian government has recognised the importance of clamping down on corruption. I welcome that development – as will world business. It is absolutely not my intention to lecture Nigeria on what or what not to do, but merely to highlight things that I think might be of interest to the wider business community. The corruption point, in my opinion, is absolutely one of those things.

My job as the UK’s financial and professional services ambassador is to build partnerships. I want showcase what the City of London – also known as the ‘Square Mile’ – and the wider UK can offer to Nigeria in the years to come. As the world’s leading financial centre we have plenty of experience that key emerging international markets, might find useful – and Nigeria is certainly one of these. We have world class firms in all areas of the financial and professional services sectors – investment banks, asset and fund management, legal services, accountancy and insurance companies to name but a few.

Public Private Partnerships is one of the areas where we are able to offer our expertise and the City stands ready to help. Not just with capability studies but everything in the timelines of these projects from financing to delivery, getting the projects from architect’s blueprints to spades in the ground. It is great to see that the Nigerian government has conceded that PPP are a better way of achieving rapid infrastructure development rather than being reliant on Federal, State or Local Governments.

Many of the UK’s biggest infrastructure projects rely on PPP, including the 73-mile London-wide Crossrail project and the London Olympics in 2012, which was delivered on time and under budget. These projects have allowed us to develop expertise and stress-test the latest techniques. With Nigeria’s plans for the Lagos-Ibadan Expressway, second Niger bridge and Lekki International Airport in the pipeline, UK firms are more than willing to provide that expertise and help Nigeria to get these projects off the ground. This is something that I will raise with the Finance Ministry and the Lagos State Governor; it will also be up for discussion at what I am sure will be a productive roundtable.

I am also keen to discuss and build on the Emerging Capital Market Taskforce and the potential benefits for the Nigerian Capital Markets sector. Having spent over 40 years working in investment banking in London and overseas, I will also discuss with government ministers, officials and regulators ways that the Nigerian financial sector can grow in the years to come

My roundtable at the Securities and Exchange Commission Office will be another highlight. There is a terrific appetite for non-interest financial services in Nigeria, with its 88 million Muslims and relatively high percentage of people who don’t use traditional banking services. Islamic Finance therefore offers a wealth of potential for alternative investment options, new business models and closer economic ties between our two countries.
London is a leading financial centre in its broad ranging expertise across many areas of financial services, including a growing range of non-interest financial products. As the European centre for non-interest finance with $19 billion of reported assets, we have been providing these services for over 30 years.

Last year, we cemented our position by becoming the first country outside the Islamic world to issue sovereign Sukuk: we received exceptionally strong demand, which related in orders totalling around £2.3 billion. More than 20 banks operate in the UK offer Islamic financial products, along with 25 law firms that supply legal services relating to Islamic Finance for the global and domestic markets. This is why the issue will be high on the agenda when I will be meeting government ministers and the Central Bank in the coming days.
•Yarrow is the Lord Mayor of the City of London.

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