Britain and Nigeria are exploring ways to list naira-denominated bonds on the London Stock Exchange to help fund infrastructure projects in the West African country, the City of London’s Lord Mayor told Reuters.

Charles Bowman, who acts as an ambassador for the British capital’s financial district, made the comments during a three-day visit to Nigeria during which he held talks with the vice president, trade minister and representatives of both Nigeria’s stock exchange and central bank.

Nigeria, once a darling for frontier investors, suffered its worst recession in a generation in 2016 after the price of its main export - oil - collapsed. It has since recovered but growth is fragile, with dilapidated infrastructure holding it back.

“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.

Bowman, speaking to Reuters in an interview in Nigeria’s commercial capital Lagos, did not provide specific details of who had been involved in the talks, how advanced discussions were or when such a move could take place.

“We have a lot of capital in London but we don’t have the projects to support. Nigeria has lots of projects to support and not the capital - you are reliant on the banking structure,” said Bowman.

“Unleash the capital market, link London and Nigeria and what a great opportunity,” he said.

Britain voted in 2016 to leave the European Union, which has forced London to rethink its trade ties with the rest of the world. The United Kingdom and the EU struck an agreement in December that opened the way for talks on future trade ties.

“Nigeria is an example where in due course one would hope to have a profitable, pragmatic free trade agreement,” said the lord mayor.

His comments come after Britain in February said its export finance agency would add the naira to its list of “pre-approved currencies”, allowing it to provide financing for transactions with Nigerian businesses denominated in the local currency.

He said the finance agency has so far provided 20 million pounds to local businesses from its 750 million pound facility.

Britain is due to leave the EU in March next year, a month after presidential elections are scheduled to take place in Nigeria.

Bowman said 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.(Reuters)

Update news