Nigeria-UK to explore naira-denominated financial instruments with the City of London

Nigeria and the United Kingdom have agreed to fast-track key regulation to deepen the insurance market, expand the digital economy and explore naira-denominated financial instruments in collaboration with the City of London. Both countries are also to endeavour to accelerate progress on franchise regulation to facilitate British brands positioning and investments that deliver sustainable new jobs in Nigeria.

These are part of the communique signed at the First Economic Development Forum (EDF) of both countries in Abuja on Tuesday by the Minister of Industry, Trade and Investment, Okechukwu Enelamah, and Foreign Secretary Jeremy Hunt, who led the UK delegation.
The Forum was launched in August 2018 by President Muhammadu Buhari and Prime Minister Theresa May as a platform to foster economic and development ties between Nigeria and the United Kingdom. Tuesday’s event was to take stock of progress against the joint commitments made and celebrate the successes achieved so far.

Other areas agreed in the communique include the acknowledgment of sustained improvements in the efficiency of Nigeria’s international airports, the Government of the United Kingdom’s ability to increase airfreight capacity of its national carriers, and enable Nigeria’s non-oil exporters to reach third market destinations via London. This joint effort supports Nigeria’s export diversification drive, pending critical trade facilitation improvements in the Nigerian ports.

The agreement also includes extensive work to consult the Nigerian and British business community and identify critical joint workstreams and key actions needed to boost bilateral trade and investment; the commitment of UK to provide more technical assistance in support of the Government of Nigeria’s efforts to diversify exports, attract investment and create jobs by improving the business environment; and the need for opportunities to showcase high quality Nigerian and British goods and services in their respective markets, and for more Nigerian exports to comply with global standards for better bilateral trade and investment.

Others are Nigeria’s commitment to continue the reforms and improvements in making the country’s operating environment conducive for businesses and investments; and collaboration to achieve a successful Africa Investment Summit in the United Kingdom in 2020 and to use the opportunity to present a strong pipeline of investable projects in Nigeria that seek partnership with British investors.

Towards this end, senior ministers shall meet in London before the end of 2019 for the second meeting of the EDF as an important step towards an Africa Investment Summit to create the conditions for more British investment in Nigeria, including in manufacturing and services.
Speaking at the Forum, Vice President Yemi Osinbajo, who supervised the signing of the communique, expressed his pleasure at the progress achieved in implementing the EDF since President Buhari and Prime Minister May initiated it in 2018.

He observed that despite the deep and long-standing relationship between Nigeria and United Kingdom, the current level of trade and investments between the two countries is materially below the potential the relationship suggests, given that Africa represents only 2 percent of the UK’s trade relationships, and Nigeria represents only a tenth of that.

He called for all hands to be on deck to ensure that “we foster the right environment to grow the level of bilateral trade and investment between our great countries”.

He said the Federal Government is not unmindful of the challenges that have hindered the business and investment environment in Nigeria, but it has taken these challenges as opportunities and have made the extensive build-out of modern infrastructure (both hard and soft) as the main thrust of the Buhari administration.

Recalling some of the achievements so far made, he said, “In the last three years, the government has allocated and disbursed over N3.5 trillion from the national budgets to infrastructure. We are committed to improving Nigeria’s competitiveness and making our country one of the easiest places to do business globally. The Presidential Enabling Business Environment Council (PEBEC) under my leadership has made significant progress in reducing bottlenecks, eliminating redundancies and increasing transparency across government ministries department and agencies.

“There is undeniable evidence that this administration is repositioning the Nigerian economy for true growth and shared prosperity. We have seen increased investor interest in Nigeria by the investment announcements that we track, with $90.9 billion of investment announcements in 2018, a 37 percent increase over the $66.4 billion tracked in 2017. We are interested in these announcements, because we know that if we nurture them correctly, we can turn them into actual investments.”

Osinbajo expressed the hope that by leveraging the EDF, both countries will continue to build on the existing foundation and work together on recording increased trade and investment flows, particularly in the areas where we have comparative advantages.

“The relationship with the United Kingdom is of strategic importance to Nigeria and we will continue to foster it,” he said.

Also speaking, Minister of Industry, Trade and Investment Enelamah said the economic relationship between Nigeria and the United Kingdom is special and mutually beneficial.
He noted that the EDF is a practical mechanism to build on the strength of the economic relationship; address challenges and hindrances to trade and investment; and expand new growth areas.

“The areas of focus for improving the investment and trade relation between our countries are clear-cut. Subsequently, we have highlighted the workstreams that we will work on for the next 6 – 24 months,” he said.

The workstreams are standards; business-to-business linkages; services trade (e.g., digital economy, business, transport, insurance); deepening investor-friendly business environment reform; investor mentoring and strategic relationship management; and manufacturing and technology transfer.

“Working together, I am confident that we can increase the volume of trade and investment between Nigeria and the United Kingdom. We are committed to building on the progress we have made so far and deliberately executing on the workstreams that we have highlighted, to achieve continuous growth in the economic relations between our two great countries,” Enelamah said.

Earlier in his remarks, Jeremy Hunt said the importance of the Nigeria-UK Economic Development Forum cannot be over-emphasised. He noted that Nigeria’s current demographics require government and other stakeholders to improve efforts and other interventions aimed at tackling unemployment and other challenges.

He advised government to adopt steps aimed at improving the investment climate, one of which is the approval of the revised Companies and Allied Matters Act.