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Nigeria: UK Export Agency to Accept Naira for Trade Payments

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In what appears a major confidence boost for the strength of the Nigerian national currency against other world currencies, the UK Export Finance Agency says it would soon add Naira to its list of “pre-approved currencies” for trade transactions.

Reuters reported that Naira would soon become one of three West African currencies that UK Export Finance agency has pre-approved for its programme of funding transactions to promote trade with Britain.

The other two national currencies were not disclosed.

The implication is that when added, 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.

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.

In 2016, a referendum to decide its continued membership of the European Union resulted in a vote for Britain to exit the Union.

Since then there has 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.

One of such reviews PREMIUM TIMES learnt was the decision to add Nigeria’s Naira as one of the few pre-approved currencies.

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

“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 a UK’s credit agency statement on Friday.

The statement said the UK 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 guarantee.

“This can enable businesses to manage foreign exchange risks and, many times, to negotiate better terms with local banks.”

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