The United Kingdom has increased its loan facility limit to £1.25bn for businesses seeking to import UK products and services as well as intellectual property into Nigeria. The Country Manager, West Africa, United Kingdom Export Finance, Steven Gray, disclosed this in Lagos exclusively to our correspondent on the sidelines of the UK-West Africa Agritech Summit.
He said, “We recently increased our country limit to Nigeria to £1.25bn to support projects seeking to get UK products services or intellectual property investments into Nigeria.” He explained that Nigeria presented promising micro economic indicators to attract investments.
On the agency’s interest in agriculture, Gray, whose export finance office is based in Ghana and covers 15 markets in West Africa, said, “We see increasingly the drive and push by the government and the private sector to invest in the agricultural space and they are looking to leverage the UK expertise and products into their investments. At the UK Export Finance, we are looking into mobilising our products to support their efforts.
He acknowledged that there were a lot of risks associated with the agricultural sector, listing them as climatic, technical, market risk, pest and flooding risk. He said, “All these go to add to the risk profile of the agricultural space and when we come to the individuals that are taking our loans for their investments, in the event that those risks are being realised to be catastrophic, how do they repay the debt?”
He advised organisers of the business to have the right product, the right equipment necessary to do their work, saying, “It takes a bit of time to get to that stage but from our side, we look at it in terms of the potential of the borrower to repay the loan and we will need to see a balance sheet of the company’s operations.
“If it is a new business, unfortunately, that is an area that is difficult for us to support unless there is a large corporation standing behind such a company. In the event that the new business fails, the big corporation should be able to stand in for them and pay the loan on their behalf,” he said.