Analysing Trade Opportunities Between Nigeria And UK
you back trade relations between Nigeria and the United Kingdom currently stands at about 7 billion pounds well this is according to the British High Commissioner uh to Nigeria Mr Richard Mont gromer the breakdown of these trade figures reveals an intriguing equilibrium while the UK exports approximately 4 billion pounds worth of goods and services to Nigeria Nigeria in turns exports around $3 billion uh3 billion pounds a b what your PN what of goods to the United Kingdom that’s 4 billion from 3 billion from us uh that’s showcasing a relatively balanced exchange of goods and services interestingly well let’s get talking and put this into proper perspective I’m being joined by an economist and research Professor uh former Chief Economist of priz water house Coopers Dr Andrew Nevin from Dallas United States thank you so much it’s good to see you hello it’s always great to see you well let’s start with the United Kingdom and Nigeria’s business relations I’m particularly excited with the figures that we see breaking that down4 billion pounds of export and also3 billion pounds on our side it looks like there’s a balance there what do you make of this figures how can we get better with trade relations well I mean I think obviously there’s such deep ties between the United United Kingdom and Nigeria and um and uh High Commissioner Richard is a great friend of Nigeria but I mean I think that uh the numbers could be bigger but also just one thing I need to point out is I think the United Kingdom right now and no fault of the high Commissioners is really being unfair to the United Kingdom of course the biggest export from the United Kingdom sorry from Nigeria to the United Kingdom is Nigerians Nigerian brains and they have a great demand for people to do many things including for example in their service industry Health service industry but the process that the United Kingdom is put for new immigrants I mean they in a sense uh are contradictory they need people to come to their country to to do the jobs that aren’t being done that are very important as the population ages but they make it very difficult and very expensive so the Visa process is expensive you get have to get sponsored by a company if you arrive in the United Kingdom some Nigerians find out that the company that sponsored them no longer has a position for them or has gone out of business they have to scramble and may have extra expenses and try to get that Visa switched so I think it’s really in that area which is really the most important export of Nigeria right now to um to to the United Kingdom it’s uh it’s it’s not really very fair right now and of course the things of the High Commissioner sites I mean the usual export of agricultural products we all know that cocoa for example uh ground nuts we also know the processes that we need to to put in place to be able to export those but those aren’t the big money the big money things the big money things are going to continue to be people both people that leave Nigeria physically so they japa but also ones that stay in Nigeria and deliver deliver Services um business processing Outsourcing so it’s a great relationship of course football is also at the heart of IT music it’s at the heart of it but there could be a lot more that’s being done and the other thing we need to add of course is the United Kingdom’s economy has done very poorly under the Tories over about 14 years it’s almost uh surely the case they’re going to lose the next election which is later this year um and the United Kingdom really has to have a bit of a rethink in this modern world how they fit in economically well but I want to follow up that do you think Nigeria has anything really to gain uh from the UK post brexit uh free markets and all of this do you see us gaining from this no not particularly as I said I mean United Kingdom has to face up it had an amazing Empire in the 19th century perhaps the greatest Empire the world has ever seen but it’s a small midlink company country Who’s country who’s has some tremendous assets but still seems to think it’s an Empire uh and you know from an economic Viewpoint I mean the vice president was supposed to be in Dallas today where I am I was really excited for his uh his visit and been organizing a few people to see him unfortunately that won’t happen but I mean the United States economy continues to power along Nigerians have a deep uh deep you know affectionate relationship with the United States I think the United States has a lot more potential for positively impacting the Nigerian economy and Society than the United Kingdom quite frankly even though my home is Britain I like that but let’s look at Major challenges what we shift to our the second part of our discussion uh to promote foreign businesses and the issues here are optional knowledge and of course standards strent standards do you think that the African continent or not just Nigeria now do you think we are ready to compete H do you think our Goods meets the standards to stay on the Shelf with imported ones well you know what I’m going to say to that we shouldn’t be focusing on exporting Goods except in a few cases again those agricultural Goods that are cited we should be exporting services and I think the you know one very big positive for the country in the last few months is the is Excellency the vice president has put in place uh a major initiative with the private sector to drive the export of services it is much easier much better competitive positioning for Nigeria to export these Services than to try to export the goods So when you say are Nigerian Goods going to be side by side on UK shelves no I don’t think that that uh is going to happen except as I said in a few agricultural Commodities but what is going to happen is that uh Nigerians are going to be sitting in Nigeria not necessarily sitting in Lego sitting in in all over the country are going to be delivering uh very high value added services that for the UK for the United States for Canada uh and for countries non-english speaking countries and in fact I mean people know I’m a big fan of Amal Hassen who created the largest um domestic Outsourcing company in Nigeria it has 2,000 employees she just opened an office in gone and that gambay office will deliver services to International clients so no Nigerian goods are not going to be competitive side by side on the shelves in the UK or Europe the United States or Canada but the Nigerian Services uh Professional Services Legal Services BP coding Services gaming uh are all going to be competitive and of course we’re very competitive in sports and in music and Hollywood already finally on this case The afcfta Still Remains on one side and um I’m not seeing so much energy around the positives of this very important uh agreement act just like AUA that Nigeria didn’t really take advantage of it do you think uh after is a game changer really no I do think it is but you know when I was in country people asked me I said look this is this is part of a 50-year uh strategy for the African Union I mean this was published in 2013 as an aspiration for 2063 and I I think people were very unrealistic in the short term how the AFC FDA would would impact Africa but you know I still think the political will is there people’s will is there for more integrated prosperous and Powerful Africa on the world stage so I think it’s just step by step so I think people that start to complain AFC FDA has not had an impact were expecting the wrong things I mean you know I think if anyone who has been around as long as I have um learns is that things at one level happen more slowly than you think in the short term but in the medium-term five to 10 years they happen faster than you think so when you hit these tipping points things go very fast so I’m not disappointed afcfta I still think you know there’s a tremendous kind of panafrican uh Zeitgeist at the present time and we’ll get the benefit from it but you know just take it step by step by step it’s not going to happen in six months it’s not going to happen in a year and I remember all of these conferences and workshops going on take advantage of AFC FDA and I said at the time I thought this was premature just take it one step at a time you harmonize standards um use technology to to you know harmonize imports and exports and then over time we will see this increasing trade between Africans so I have no doubt about it over the medium and long term but I’m not surprised in the short term people are finding it challenging interesting let’s now talk about energy prices and this is not limited to Nigeria we see a serious shift when it comes to Energy prices even here in Nigeria desp the airports by the Dango Refinery diesel is still selling for a th000 or a bit a little above a th000 naira for PMS we still have issues around the pricing and of course electricity tariff is also on the high side you would remember ibe when you were still in the country there we didn’t have the issue of the band a band B now band a users are paying above2 200 na for one unit of electricity being consumed uh by every home every customer my question to you now is is what do you make of all of this increases on our purchasing power moving forward how does it affect Nigerians that already have less purchasing power what does it mean for us well first off the fact that we’re having this conversation too is absolutely crazy we are a major energy net exporter major energy producer I think we have the world’s second or third highest reserves of gas and we’re complaining about high energy prices we should be in a situation where High Energy prices are fantastic for us and of course when we use the gas domestically to produce electricity that should actually be very low cost solar we’ve got abundant solar you know so what’s the root cause of this I mean you know I’ve been saying for at least a year number one uh objective of the government is to get oil production up because it’ll stabilize the exchange rate it’ll in fact bring it down I mean why we have $80 oil you say high energy prices and yet we have exchange rate at 1,200 1400 it was almost 2,000 a few weeks ago so you know this is completely self-inflicted that the fact that high energy prices are causing hardship to Nigerians if the government could manage and of course we announced almost a decade ago that we would become uh uh you know we were more of a gas country than an oil country which at the time I said was exactly right but you know the execution by the government first by the last Administration but you know very disappointingly I was one of the people who was very optimistic when his Excellency president ubu came in you remember almost a year ago or I guess almost exactly a year ago now we had the initial announcements around around the FX harmonization about the REM removal of oil subsidy you know they came out and said we would get oil production up which is I’ve said from an economic Viewpoint would stabilize the exchange rate not at a, but at 600 500 and that simply hasn’t happened and again I come back to the nnpc I don’t understand why there’s such a lack of transparency at the nnpc so the CBN you know changed leadership there was a a big change in governance new new regime there transparency you know CBN and nmpc are the two most important Economic Institutions in the country nnpc is the greatest asset of the Nigerian people apart from Nigerian brains which everyone knows I I talk about but as a hard asset nnpc is the greatest asset and yet there’s no transparency it’s not clear what’s going on there are rumors that the foil subsid has crept back into it we have an exchange rate that’s really problematic I mean when you produce electricity uh I mean the solar might be free the gas might be low price but all the physical infrastructure the capital costs of course are paid in US dollars so when you let the exchange rate get to $121,400 the discos rightly say and and the uh producers rightly say the energy producers you know we need higher tariffs in therea so again this is completely self-inflicted we should be celebrating $80 oil I think is a sweet spot for Nigeria we should be producing 2 million 2.2 million barrels a day we should be producing lots of gas exporting some of it using it domestically for electricity we should be taking advantage of solar we should have a 500 n exchange rate and then then we would be in a very good place but so we’re in The Sweet Spot for where Energy prices are for our economy but we haven’t taken advantage of it because of the execution failures which I largely lay you know lay blame it to the to the the new Administration has had a year to get this under control and have not made much progress so sorry to be so blunt it’s obviously a little easier to be so blunt when I’m no longer with PWC but you know I remain very optimistic about Nigeria but this issue of the nmpc not performing uh and then you know we talk about this incredible investment we should have in gas which we should have is not coming whether it’s for regulatory reasons or whether it’s because we you know can’t execute at the government level this needs to get solved otherwise you’re going to continue to have this hardship on Nigeria’s electricity prices taking more of their budget people not having access to power I mean I was told a home solar system now is 800,000 naira I mean not a big surprise given the movement in the exchange rate so all of a sudden something that should be accessible to you almost every Nigerian is no longer accessible so it’s really a tragedy and I think the government needs to really focus on why nnpc is not being performing but I want to follow up with the nnpc issue which you’ve raised and the argument will be the petroleum industry Act is supposed to open up the activities of the nnpc at the moment many say there is still under recovery because actually if you look at the price of crude and in the international market the price of PMs and Diesel should be almost at par so it’s a see there’s an intervention Again by government so that brings us back to the question of subsidy and implementation of the Pia how does all of this come to you well I mean we said there was no subsidy the idea was that there would be multiple players that could import petroleum products into the country um as you say you just look at the mathematics there must be a subsidy somewhere it’s totally opaque how that’s getting getting paid I mean that that in a way is taking away as we know before when when you remove the subsidy back a year ago immediately the states the local LGA got you know a significant amount of money they were in effect carrying a lot of the subsidy but it’s the fact that this is so opaque that I think the Nigerians should be upset about what where are the accounts for the nnpc I we have the Pia I mean I’ve always advocated for um uh some flotation of of parts of the of of nnpc some people have advocated for floating nnpc partial FL flation so say 20% so Nigerians still own 80% of it but the is Flo on the stock market others can buy directly into it but that would force nmpc to have much more transparency so we’ve had the Pia and people kind of understanding concept where it was supposed to take take us to but I don’t see the path forward um and for specifically on the subsidy issue you know we should have much more transparency right now what is happening within the money Flows at the um at the nmpc are we paying the cash calls to keep our share of the production for example you know this is a National Asset that’s owned by Nigerians and we don’t have that transparency what’s actually going on interesting interesting a lot of development there let’s wrap up almost fin you talked on gas which for me remains also very important that same document the Pia is supposed to open up this segment of the oil and gas industry and attract investment particularly for gas infrastructure which we lack as a country now do you see us getting also along that line are we moving towards energy transition in this part of the world in your judgment because we are decade of gas a lot around gas but we are still not taking advantage of it infrastructure no know we haven’t we haven’t made much progress I mean this is there are lots of positive things going on in the economy and and sorry I just also need to say I was very upset about the destruction of landmark in Legos I mean you know you talk about getting investment into the country so an investor who’s bringing in assets like gas assets which are supposed to last 20 years they Watch What Happens at Landmark and other cases but in the landmark case you know the leadership there had invested a long period of time that Landmark Center I mean many many people listening have been there for different events was the home to the bookstore that uh that carried the book that rui and um and I wrote and others on self-organizing Nigeria and to see it destroyed for the I I mean there you know we know the coastal highway is not going to be anywhere near that close to the coast when it arrives in Legos so that was complet completely uh opaque to me what was the reason for it and but you know why we’re not getting gas investment any investor is going to know these kinds of stories happening and are going to be reluctant so we haven’t made much progress we had a golden opportunity when you know sadly Russia invaded Ukraine and Europe realized it was um its gas security situation was was very difficult you know we could have really followed up there and tried to create the conditions in which Europe would would secure its gas supply in Nigeria that didn’t happen on that so the gas has been B disappointment quite frankly so in all of this let’s do a general overview what’s your outlook for Nigeria’s economy and of course the globe there are still a lot of issues around the globe affecting movement of goods and services affected uh transmission channels and chains uh so what do you think even the F scarcity we have had in Nigeria where I we still have uh was alluded the issues were part of it was that some refineries are going through turnaround maintenance that’s abroad in Amsterdam and some other countries what’s your outlook for the global economy of course seeing also with Nigeria and what is happening here well the global economy is going to just grow slowly right I mean you have all the issues that you’ve cited and also just the fact that globally the world is aging and people who are older don’t produce or consume as much so the idea that the global economy’s growth rate is going to bail out Africa or Nigeria is is misplaced but you know I’ve consistently said said over the years we can’t do anything about the global economy all we can do is what’s going on in Nigeria so you know why am I optimistic because despite all the global problems but and despite the domestic things I’ve highlighted today there’s still lots of Nigerians trying to do Innovative things some of them for profit some of them in the in NOS so again I think these these bottomup initiatives whether in the private sector or the the NGO sector are the things that are ultimately going to transform Nigeria now if we had better federal government of Nigeria not I won’t say policies we have great policies if we had better execution the federal government things would go faster but you know this bottomup um Forces in Nigeria state level forces are really high sighted Malls opening something in gambay which is fantastic so a lot of that’s going on we continue to repeat the bad news I don’t like repeating the bad news as you know so I’m optimistic but I think it’s going to take a bit longer than I would have liked because the federal government hasn’t delivered on on um the enormous promise it had a year ago but please stop worrying about the global economy the global economy is only going to grow 2% for the next two decades wow but not one way or the other impact what we expect here too don’t you think so I Nigeria is the got the sixth seventh or sixth largest population country in the world West Africa’s 500 million people there’s plenty of domestic Market if things were going well I mean the whole idea of afcfta was Africans have to be wealthy Africans have to trade with African so there’s lots of opportunity even if the number of people in Europe is shrinking it’s just my view well I like that on that very optimistic note let’s wrap up this conversation uh thank you so much uh for your time Economist research Professor uh Dr Andrew Nevin thank you so much do enjoy the rest of your day and we really appreciate your time too it’s always a great pleasure to be with you brother and stay optimistic all right there are
Trade relations between Nigeria and the United Kingdom (UK) currently stands at about £7 billion pound. This is according to the British High Commissioner to Nigeria, Mr. Richard Montgomery.
The breakdown of these trade figures reveals an intriguing equilibrium. While the UK exports approximately £4 billion worth of goods and services to Nigeria, Nigeria, in turn, exports around £3 billion worth of goods to the UK, showcasing a relatively balanced exchange of goods and services
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