Britain and Nigeria are looking at ways to list naira-denominated bonds on the London Stock Exchange in order to help fund infrastructure projects in Nigeria. This was made known to Reuters by Charles Bowman, who acts as an ambassador for the British capital’s financial district, during a three-day visit to Nigeria.
“We are looking at clever methods of essentially being able to list, by way of example naira-denominated bonds, but having those listed on the London Stock Exchange. Having local bonds with an access point into the London Stock Exchange,” said Bowman.
This comes five months after the United Kingdom’s credit agency, UK Export Finance included the Nigerian naira as one of the international currencies that it will give its support to for financing transactions. The inclusion also allows the naira to be used in the United Kingdom as a trade currency for business transactions such as exports from the UK. So far the finance agency has provided 20 million pounds to local businesses from its 750 million pound facility.
However, Bowman did not provide details of how far they have gone in the talks or when the move could take place. He also revealed that there is a lot of capital in London but there are no projects to support. He further said that Nigeria has lots of projects but it doesn’t have the capital hence it is reliant on the banking structure for capital. He believes that unleashing the capital market link between London and Nigeria will be a great opportunity.
Nigeria which was once the apple of investor’s eyes was affected by the fall in oil price in 2014 which led it to slide into recession. Although, the country has come out of this economic problem that affected it greatly it is yet to get back to its previous position because most of its infrastructures are already in a miserable state.
Bowman also said that conducting peaceful elections next year could help boost Nigeria’s image abroad and attract the sort of capital badly needed in the West African nation to develop infrastructure and propel growth.