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Expert sees acceptance of naira by UK Export Finance Agency as good for economy

Leading economic analyst, Dr. Boniface Chisea has described the recent announcement by UK Export Finance Agency to add the naira to its list of “pre-approved currencies” for trade transactions as one of the best things to happen to naira this year.

In an interview in Lagos, the expert said “Such listing will among other things afford Nigerian agro-exporters the chances to getting certain leverages in processing their export activities.

“Naira will begin to look up very soon based on the UK plan to include the currency in its list of approved currencies for daily transactions.

“Nigerians and others in the UK wishing to use the naira to make payments or provide financing for business transactions denominated in the local currency would be able to do so without hindrance.

In the voice of the British High Commissioner to Nigeria, Paul Arkwright, “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”.

UK also added that the government would provide up to 85 per cent of funding for projects containing a minimum of 20 per cent British content. “The naira financing will follow the same structure as someone buying in pound sterling, except that Nigerian firms taking out a loan in local currency can benefit from a UK government-backed.

According to the new plan, Naira would become one of the three West African currencies that UK Export Finance Agency has pre-approved for its programme of funding transactions to promote trade with Britain.

However, the only exception, the statement said, would be in the area of loans taken in local currency, which must equally be repaid in local currency.

It would be recalled that in 2016, a referendum to decide its continued membership of the European Union (EU) resulted in a vote for Britain to exit the Union.

Besides, there have been extensive consultations by the UK government with the EU and other trade partners on the need to review the terms of its trade ties with the rest of the world.

Since December 2017, the UK government and the EU have agreed to discuss ways to improve future trade ties with member countries.

It is important to note that Nigeria has for long remained one of UK government’s biggest trade partners and allies, particularly in the West African sub-region.

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