The Naira will become one of three West African currencies that UK Export Finance has pre-approved for its programme of funding transactions that promote trade with Britain. The move would enable Nigerians and others in the UK to use the Naira to make payments or provide financing for business transactions. The other two countries accepted have not yet been revealed.
Britain voted to leave the European Union in 2016, which has forced London to rethink its trade ties with the rest of the world. It has said it would start preliminary talks with India about an eventual bilateral trade deal.
The United Kingdom and the EU struck an agreement in December that opened the way for talks on future trade ties.
“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,” Reuters quoted the British High Commissioner to Nigeria, Paul Arkwright, to have said in the UK’s credit agency statement. The statement said the UK would provide up to 85 percent of funding for projects containing a minimum of 20 percent British content.
“The Naira financing will follow the same structure as someone buying in sterling, except that Nigerian firms taking out a loan in local currency can benefit from a UK government-backed guarantee.
“This can enable businesses to manage foreign exchange risks and, many times, to negotiate better terms with local banks.”
Meanwhile, the Central Bank of Nigeria (CBN) once more intervened in the Retail Secondary Market Intervention Sales (SMIS) yesterday to the tune of $325.64 million.
Figures obtained from the bank indicated that the amount released was for requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.