UK Signs Enhanced Trade, Investment Partnership Agreement With Nigeria

The United Kingdom and Nigeria have signed an Enhanced Trade and Investment Partnership (ETIP) to increase trade and investment between the two countries and create new opportunities for UK and Nigerian businesses.

Kemi Badenoch, the UK Minister for Trade and Business, and her Nigerian counterpart, Doris Nkiruka Uzoka-Anite, signed the ETIP in Abuja on Tuesday.

The Enhanced Trade and Investment Partnership (ETIP) is the first the UK has signed with an African country, and it aims to expand the UK and Nigeria’s already thriving trading relationship, which totaled £7 billion in the fiscal year ending September 2023.

This agreement will open up opportunities in sectors critical to both economies, such as finance and legal services, while also encouraging new collaborations in innovative areas such as the creative industry. The Secretary of State’s visit comes just a week before a UK government-led fashion and beauty trade delegation travels to Nigeria.

The ETIP also kicks off further collaboration on the UK’s ambitious Developing Countries Trading Scheme (DCTS), which was launched last year and sets simpler and more generous trading terms for Nigeria and 36 other African countries.

Nigeria is a major beneficiary of the DCTS’s changes, with tariff reductions on over 3000 products, implying that 99% of current Nigerian exports to the UK will be duty-free. Tariffs have been lifted on Nigerian goods that promote value addition in key non-oil export sectors such as cocoa butter and paste, sesame oil, and clothing and apparel. These changes will increase trade with the United Kingdom and support the Federal Government of Nigeria’s overall trade policy priorities.

Badenoch stated, “The UK and Nigeria are important partners with long-standing historical and economic ties.

“UK businesses are already enjoying great success in Nigeria, one of the world’s fastest growing economies.

“I am delighted to be here to sign our new enhanced partnership, which will make it easier for UK firms to export their world-class goods and services and expand their presence in Nigeria.”

Doris Nkiruka Uzoka-Anite, Nigerian Minister for Trade, stated: “The UK is one of our long-standing strategic partners with whom we have strong ties, and I am pleased that this relationship will be strengthened as we sign the Enhanced Trade and Investment Partnership.

“This partnership will shift Nigeria-UK relations from one of shared history and strong bonds to one of shared economic prosperity. From expanding market access and supporting our thriving businesses to creating more jobs and accelerating greater investment in areas of mutual interest.”

The ETIP will contribute to the significant progress already made in removing market access barriers in the education and financial sectors, resulting in a more favourable trading environment for UK and Nigerian businesses.

Furthermore, this partnership provides an opportunity to leverage UK and international investment from the City of London, which is home to the best financial and professional services.

TheCityUK International Managing Director Nicola Watkinson stated, “Nigeria is an important growth market for the UK-based financial and professional services industry, and TheCityUK welcomes the signing of the new ETIP.”
“We look forward to continuing our engagement with the working groups to improve market access and reduce regulatory barriers.”

During his visit, Minister Badenoch will also hold a groundbreaking ceremony at Abuja’s first industrial park, which is being built by UK-Turkish construction firm Zeberced Ltd to open support services areas.

The UK government has helped the company in a variety of ways. The $144 million industrial park will create 620 direct jobs and 1,650 indirect jobs, as well as serve as a hub for major firms seeking to access central and northern Nigeria.

The UK trade minister will also witness the signing of a landmark energy agreement between UK-based energy firm Konexa and Nigerian power generation company North South Power (NSP).

The agreement will allow Konexa to supply Nigerian Breweries PLC with 100% renewable power, promote sustainable development and clean energy adoption, and result in infrastructure investments of more than £14 million.

Konexa CEO Pradeep Pursnani stated, “This is a significant milestone for Konexa, North South Power, Nigerian Breweries, and all of our investment partners.” Over the last few years, Konexa has been developing a disruptive model for matching customer energy demand with renewable energy supply.

“We are excited to invest over £120 million in renewable energy generation, transmission, distribution, and battery storage solutions to assist our customers in transitioning away from the use of fossil fuels.”

UK exports to Nigeria totaled £4 billion in the 12 months ending September 2023, up 3% in current prices from September 2022. This included £1.3 billion in goods and £2.6 billion in services.

The ETIP will expand on the UK’s Developing Countries Trading Scheme, which has already granted enhanced preferential access to over 3000 products, implying that 99% of existing Nigerian exports to the UK by value will be duty-free.

Tariffs have been lifted on Nigerian goods in key non-oil export sectors such as cocoa butter and paste, sesame oil, and clothing and apparel.

For example, 14% of tariffs have been removed from prepared tomatoes, 4.5% from sesame oil, 6.4% from woven cotton, 4.5% from cocoa paste, and 12.5% from plantains.

Working groups and business dialogues will be held to ensure that businesses on both sides benefit from the ETIP’s opportunities.

Following the Secretary of State’s visit, His Majesty’s Deputy Trade Commissioner for Africa will lead a fashion and beauty retail trade mission from the UK to Nigeria, with eight UK brands seeking retail and e-commerce partnerships in Nigeria. These include the Boohoo Group, Kartel Watches, and The Gel Bottle, among others.

Konexa has a Generation and Trading licence, a TUoS (Transmission Use of System) agreement with TCN, and a DUoS (Distribution Use of System) agreement with DISCOS, which allow them to transport renewable electrons to customers via transmission and distribution networks, including network improvements.

North South Power (NSP) is an indigenous power generation company with over 600MW of operational hydropower on the national grid (approx. 8% of total national energy supply). The Power Purchase Agreement (PPA) being signed is for a new 30MW hydro asset, which they will commission in December 2024.

The new agreement will assist Nigerian Breweries (Heineken, Kaduna) in obtaining 100% renewable power through a combination of hydropower, battery storage, and a power management system, paving the way for more sustainable industrial operations in the region.