Britain adds Nigeria’s naira to list of accepted trade currencies

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FILE PHOTO: A man counts the Nigerian naira at a currency exchange market in Ikeja district in Lagos, Nigeria August 12, 2017. REUTERS

Britain’s export finance agency is set to add Nigeria’s naira to its list of pre-approved currencies.

The move will allow the agency to finance transactions with Nigerian businesses in the local currency.

The naira will become one of three West African currencies that UK Export Finance has pre-approved.

Analysts have welcomed the impact of the financing option on the local currency. However, they say the move may increase Nigeria’s liability as trades mature for settlement.

Analysts also question the rate at which funds would be disbursed, since local interest rates are in high double-digits.

The naira financing will follow the same structure as someone buying in sterling, except that Nigerian firms taking out a loan in the local currency can benefit from a UK government-backed guarantee, Reuters said.

Britain in 2016 voted to leave the European Union, forcing London to rethink its trade ties with the rest of the world.