The United Kingdom Export Finance, UKEF, says it will now accept naira payments from Nigerian business owners who make purchases in the UK.
The UK department said the local currency financing structure follows the same format as a conventional buyer credit in sterling or any other currency.
“UK government will now be able to support finance in naira to Nigerian projects procuring from the UK,” the statement read.
“This can enable businesses to manage foreign exchange risks and, many times, to negotiate better terms with local banks.”
Paul Arkwright, British high commissioner to Nigeria, said the arrangement shows the kind of value UK places on its relationship with Nigeria.
“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,” he said.
“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, said the agreement is the feedback from the UK trade envoy’s visit to Nigeria in November.
“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,” he said.
“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.”
This development makes Nigeria one of the three West African countries on UKEF’s pre-approved currencies list.
“UKEF provides a range of innovative and flexible products, providing up to 85% funding for projects containing a minimum of 20% UK content,” he said.
“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.”