The acceptance of the Britain’s export finance agency last week to add the naira to its list of “pre-approved currencies”, has no daubt has its pros and cons on trade between the two countries. Below are key of them:
1. It will provide financing for transactions with Nigerian businesses denominated in the local currency.
2. It will provide a firm foundation for a significant increase in trade and investment between both countries.
3. The naira financing will follow the same structure as a someone buying in sterling, except that Nigerian firms taking out a loan in the local currency can benefit from a UK government-backed guarantee.
4. It would help local importers buy British goods such as machine and equipment
5. More burden for CBN to remit FX (Pound) to Britain
6. Less priority to made in Nigeria goods