UK Export Agency To Accept Naira For Trade Settlements

This picture taken on January 29, 2016 in Lagos shows 1000 naira banknotes, Nigeria's currency. Nigeria's central bank governor, Godwin Emefiele, on January 26 dismissed calls to devalue the naira in his monetary policy committee statement. Instead he chose to continue propping up the currency at 197-199 naira to the dollar and maintain foreign-exchange restrictions. As a result, the naira on the black market is hovering around a record low of 305, fuelling complaints from domestic and foreign businesses who can't access dollars required for imports. / AFP / PIUS UTOMI EKPEI (Photo credit should read PIUS UTOMI EKPEI/AFP/Getty Images)

Struggling Nigeria’s national currency may soon rebound against other world currencies as the UK Export Finance Agency says it would soon add the naira to its list of “pre-approved currencies” for trade transactions.

It was reported at the weekend that naira would soon 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.

Although the other two national currencies were not disclosed, finance experts say 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 without hindrance.

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 (EU) 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.

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,” the British High Commissioner to Nigeria, Paul Arkwright, was quoted 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.

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