Now that the dust has settled and British Prime Minister Theresa May has left “Africa”, we can finally ask the question that matters: What next?
New Trade Deals?
It is no news that the United Kingdom (UK) has opted to leave the European Union (EU), and has been foraging the world seeking new trade deals. One stop on the UK's world tour is its old stomping ground, Africa, with South Africa, Kenya and Nigeria being the first ports of call.
Nigeria is the UK's second biggest trading partner in Africa, but what does a new trade deal mean for Nigeria in the face of the Brexit impasse? The UK has been greasing its economic links with Nigeria. Earlier this year, it added the naira to its roster of "pre-approved currencies", meaning that the UK export finance agency will allow Nigerians to import from the UK using the naira up to a limit.
While the UK can't sign any trade deals until it leaves the EU, Theresa May showed an appetite to boost trade as she set up an economic development forum, which will look to double trade with Nigeria by 2030 from $5.44 billion in 2017.
It all sounds promising, but it will be interesting to see what kind of trade deal the UK will sign with Nigeria post-Brexit. As things stand, the UK is not one of our main trading partners and the apparently false reports on yam exports to the UK being rejected hints at Nigeria's ability to meet the EU or UK's standards on food, regardless of how low tariffs are.
As with all trade deals, the UK will be looking to benefit itself in the end, and Nigeria must stay vigilant in ensuring that we also win from whatever deals we sign.
Nigeria remains a very attractive country for investment due to its large population and enormous mineral resources, irrespective of its challenges. However, the slowdown in economic growth to 1.5% in the most recent quarter shows that the economy needs a confidence boost. Statements from the British Prime Minister expressing interest in the Nigerian economy could be a balm.
The Prime Minister also stopped over in Lagos State where she met with Governor Akinwunmi Ambode and business leaders, and announced a Fintech partnership between Nigeria and the United Kingdom worth £2 million to support Nigerian innovators. This is against the backdrop of Seplat and Dangote Cement Group's recent commitments to listings on the London Stock Exchange.
During the visit, the Governor also announced that due to the reforms in Lagos, the British Prime Minister also expressed readiness to open an export credit facility worth £750 million for Lagos State.
What does this mean for Nigeria? Her interest in Nigeria should help renew faith in our economy. Furthermore, the UK is unique in its support for innovation and business trade links. The UK being a service based economy will help to boost that sector in Nigeria. This would be a productive complement to all the investment coming from China, which seems to favour physical infrastructure.
Over the years, the British Foreign Aid Department has played an active role by pledging millions of pounds to Nigeria. The 2018/2019 budget of the Department for International Development (DFID) in Nigeria is £235 million, which at the official Central Bank of Nigeria (CBN) rate of ₦305/$1 is more than the budget of Yobe State.
With the threat of Boko Haram in the North-East, there was a renewed commitment to fight the scourge of terrorism during the Prime Minister's visit. It was arguably the lead item on her agenda as the UK is increasingly taking an interest in Nigeria's security. Recently, an MP began protests outside the Nigerian High Commission in London for the return of schoolgirl Leah Sharibu who was kidnapped by Boko Haram along with over 100 schoolgirls in February.
The UK and Nigeria signed a security and defence partnership. In it, the UK will provide training to the military to help our soldiers deal with explosive devices, and has offered to help train full army units. Theresa May also committed an additional £13 million which will be spent on an educational program for the estimated 100,000 children living in the conflict zone.
The support is welcoming and one would hope that these fundamental issues will also get more focus from the Nigerian government itself. The UK as a developed ally knows that education, innovation, and security are essential for prosperity. Their ability to completely solve our problems is limited, and so it's up to us to take the small boost and finish up the job.