Nigeria and India to Establish Local Currency Trade Settlement System

Nigeria and India are on the brink of finalizing a local currency trade settlement system to streamline international trade between the two countries. This development emerged from the second annual Joint Trade Committee (JTI) meeting, chaired by the permanent secretary of Nigeria’s Ministry of Industry, Trade, and Investment, as reported by the Indian Ministry of Commerce.

The meeting primarily focused on identifying areas of mutual interest to enhance bilateral trade and foster economic growth. Both sides recognized various sectors for potential collaboration, including crude oil and natural gas, pharmaceuticals, unified payments interface (UPI), power sector, renewable energy, agriculture, food processing, education, transportation, railway, aviation, MSMEs, and development initiatives.

A significant outcome of the discussions was the agreement to expedite the conclusion of the Local Currency Settlement System Agreement to bolster bilateral economic ties.

The Indian delegation, comprising representatives from the Reserve Bank of India, EXIM Bank of India, and the National Payment Corporation of India (NPCI), underscored the importance of this agreement in facilitating smoother trade transactions between the two nations.

• India ranks among Nigeria’s top trade partners, with bilateral trade reaching N5.88 trillion in 2023, making it Nigeria’s third-largest trade partner for the year, according to the National Bureau of Statistics (NBS).
• The move towards establishing a local currency settlement system reflects a broader global trend seeking to diversify trade away from the dominance of the US dollar. This initiative aligns with the objectives of the BRICS+ group, of which India is a founding member.
• Nigeria’s Foreign Affairs Minister, Amb. Yussuf Tuggar, has expressed Nigeria’s intention to join the BRICS economic bloc within the next two years. This decision comes following BRICS’ recent extension of membership invitations to five additional countries, including two African nations, Egypt and Ethiopia. Nigeria’s absence from the invitation list during the last meeting in South Africa raised questions among analysts about Africa’s largest economy’s exclusion.