The support will come through the UK’s Export Credit Agency, UK Export Finance (UKEF), which helps UK companies 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 now Nigerian businesses buying British goods or services and taking out a loan in Naira from a bank in Nigeria can benefit for a UK Government-backed guarantee.
This can enable businesses to manage foreign exchange risks and, many times, to negotiate better terms with local banks.
British High Commissioner to Nigeria, Paul Arkwright said this gives 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”.
Ben Ainsley, Head of The Department for International Trade (DIT), Nigeria, noted that – “We are excited to be able to offer Nigerian, as well as British, businesses the ability 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% funding for projects containing a minimum of 20% UK content. The development makes 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 Department for International Trade in Nigeria for guidance.
The Department for International Trade (DIT) is a United Kingdom government department responsible for striking and extending trade agreements between the United Kingdom and non EU states. DIT’s purpose is to develop, coordinate and deliver a new trade policy for the United Kingdom, including preparing for and then 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.