Business

UK strikes trade deal with New Zealand – but it may add nothing to GDP

Britain has struck a trade deal with New Zealand, a key ally, as ministers hope to stem the country’s reliance on China – but the agreement is expected to add no value to the UK’s gross domestic product.

Despite the Department for International Trade heralding the deal as a “groundbreaking” achievement that was a “vital part” of Boris Johnson’s commitment to levelling up, the prime minister has been accused of selling out British farmers.

Tariffs as high as 10% are set to be removed on a range of UK goods, including clothes, buses, ships and bulldozers. The price of New Zealand-produced sauvignon blanc, manuka honey and kiwifruit should dip after 16 months of talks.

Trade between the UK and New Zealand is now worth £2.3bn a year, and the government said that would rise as the deal would make it easier for smaller businesses to break into the New Zealand market – as well as remove barriers for advanced tech and services companies.

It follows the recent trade agreement struck with Japan and the deal struck in principle with Australia. The focus on the region is part of Johnson’s 10-year plan to tilt the UK’s foreign policy focus towards the Indo-Pacific, strengthening the alliance and position of democratic countries in the region to make them more competitive against China.

New Zealand is heavily reliant on China for trade, with more than 30% of its exports going to Chinese markets. The country has come under fire in the past for adopting slightly gentler rhetoric on China than some of its allies – a stance critics have claimed is as a result of trade dependency. Foreign minister Nanaia Mahuta has previously urged exporters to diversify and reduce their vulnerability to geopolitical shocks like the trade war Australia is experiencing.

New Zealand opposition leader Judith Collins told the Guardian this month that by not providing free trade agreements, the US and UK were “leaving the door open” to Chinese dominance in the indo-Pacific region.

Ardern said that Covid-19 had taught the country that “we must have as many options for our world-class products to ensure certainty for our primary producers, our economy and our people”.

The deal may boost New Zealand’s GDP by $970m or around 0.3%. However, last year’s analysis by the UK government found that its effect on Britain’s GDP would probably have “limited effect … in the long run” – being between a positive growth of 0.01% or negative growth of -0.01%.

Boris Johnson said: “This is great trade deal for the United Kingdom, cementing our long friendship with New Zealand and furthering our ties with the Indo-Pacific. It will benefit businesses and consumers across the country, cutting costs for exporters and opening up access for our workers.”

New Zealand prime minister Jacinda Ardern said: “It’s one of our best deals ever and secured at a crucial time in our Covid recovery.”

“This deal will cut costs for exporters immediately, creates opportunities for New Zealand businesses to grow and diversify their trade, while boosting the economy as we recover from Covid-19.”

Minette Batters, the National Farmers Union president, said it would open the country’s doors to “significant extra volumes of imported food – whether or not produced to our own high standards – while securing almost nothing in return for UK farmers”.

She added: “We should all be worried that there could be a huge downside to these deals, especially for sectors such as dairy, red meat and horticulture. The government is now asking British farmers to go toe to toe with some of the most export-oriented farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so.

“It’s incredibly worrying that we’ve heard next to nothing from government about how it will work with farming to achieve this.”

Labour’s shadow international trade secretary, Emily Thornberry, echoed the criticism and said the deal would generate just £112m in additional exports for UK firms compared with pre-pandemic levels. Referring to the price tag of a new national flagship, she claimed the total value for businesses from the agreement would be “less than half the cost of Boris Johnson’s new yacht”.

Thornberry said: “It is a deal whose only major winners are the mega-corporations who run New Zealand’s meat and dairy farms, all at the expense of British farmers who are already struggling to compete. But for British jobs, growth and exports, this deal is yet another massive failure.”

Business

NCAA to punish airline operators for delayed tickets refund

N46bn debt: NCAA threatens to withdraw airlines’ licences

The Nigerian Civil Aviation Authority, NCAA, has expressed its readiness to punish any airlines that delay tickets refund to the passengers.

The Director of Public Affairs and Consumer Protection, NCAA, Michael Achimugu, made this known in a statement on Tuesday in Abuja,.

He said tickets refund compliance regulations remain central to the NCAA’s consumer protection agenda.

According to him, the time had come for airlines to adhere strictly to the refund timelines as failure to comply will attract immediate sanctions under Part 19 of the regulations.

The director said Part 19 of the NCAA Regulations 2023 aimed to safeguard passenger rights.

Speaking on a specific case involving Air Peace, the director stated that the airline had exceeded the stipulated refund timeframe, compelling the NCAA to demand swift compliance.

Achimugu added that the incident has triggered the regulators to take decisive action against any form of non-compliance.

“Cash purchases must be refunded immediately, and by cash. Refunds for electronic payments, including mobile apps and internet banking, must occur within 14 days.

“Over the past year, the NCAA has worked with airlines to enhance passenger experience and resolve operational challenges.

”The Authority has maintained a balanced approach, fostering cooperation between operators and regulators to promote better service delivery.

“Most airlines have been responsive, and the relationship between operators and the NCAA has significantly improved, benefiting passengers across the board,” he said.

Achimugu, however, said that the era of leniency had ended with stricter enforcement measures now in place, adding that airlines that failed to meet the refund timelines outlined in the NCAA Regulations 2023 would face sanctions

Business

AfDB Offers Solutions To Nigeria’s Debt, Forex Challenges

The African Development Bank (AfDB) has provided key insights into how Nigeria and other African nations can address their growing debt burdens and foreign exchange challenges.

The Bank’s Vice-President for Economic Governance and Knowledge Management, Prof. Kevin Urama, told the News Agency of Nigeria (NAN) that strategic borrowing and political stability were critical for growth.

Speaking on Nigeria’s debt profile, Urama, the AfDB’s Chief Economist, said that public debt itself was not inherently problematic.

“Debt for growth is a known way of growing economies. However, the quality and structure of the debt are crucial factors in determining its long-term impact,’’ he said.

The professor raised concerns about the growing trend of short-term, high-cost commercial loans in African countries, which came with higher refinancing risks.

“The problem arises when countries borrow short-term loans and are unable to repay them before investments mature. This cycle forces countries to continuously refinance, often at unfavourable terms.

“It is therefore important for African governments to focus on borrowing longer-term loans with lower interest rates, underpinned by clear investment plans that can generate returns capable of repaying the debt.

“For Nigeria, the key question should not be whether the country is borrowing more, but rather how borrowed resources are being used.

“If borrowed funds are invested in infrastructure that drives growth both in the short and long term, it is a smart move,” he said.

On foreign exchange and trade, Urama pointed to Africa’s dependence on imports, specifically food, as a critical area for reform.

He acknowledged the ongoing disruption of global supply chains due to geopolitical tensions, including the war in Ukraine, which had affected wheat imports to Africa.

The professor, however, urged African countries to address their dependence on imports, especially when the continent was home to vast agricultural potential.

“Africa has no business importing wheat from Ukraine because we have 65 per cent of the remaining arable land in the world.

“We also have a vibrant, youthful population eager to engage in productive activities. Africa has the capacity to feed itself and the world.

“And this can be achieved through initiatives such as the AfDB’s AgriPreneur and Special Agro-Industrial Processing Zones (SAPZ) programmes which are crucial tools for unlocking the continent’s agricultural potential,’’ he said.

Urama cited Ethiopia’s success in becoming a wheat exporter within just four years of focused agricultural investment.

He said this was a demonstration that Africa could transition from food dependence to food self-sufficiency and even become a global exporter.

On the broader economic challenges facing Nigeria and other African countries, the professor reiterated the importance of political stability and sound macroeconomic policy management.

Urama pointed to Botswana as an example of how stable governance and good policy could reduce capital costs, increase foreign investment, and improve economic growth.

“When political stability and good governance are in place, the cost of capital decreases, and investments flow more freely,” he said.

According to the AfDB vice-president, Africa’s economic challenges are solvable through long-term strategies focused on stability, sound economic management, and a shift towards local production and value addition.

“By doing so, African countries can reduce their dependence on external financing, stabilise their currencies, and ultimately foster sustainable economic growth,’’ he said.

(NAN)

Business

BOI disburses N22.89bn to 29 manufacturers

The Bank of Industry (BOI) says it has disbursed N22.89 billion out of the N75 billion manufacturing sector intervention fund to 29 manufacturers.

Its Managing Director, Dr Olasupo Olusi, made this known on Monday at the first BOI interactive session with the Organised Private Sector in Abuja, which was monitored virtually.

Advertisement
Olusi said that out of the N75 billion manufacturing sector fund, other 20 projects valued at N6.3billion were at different stages of disbursement.

He said that the interactive session was a collaborative milestone, a reflection of shared vision to create a thriving industrial sector.

Advertisement
According to him, it is also a critical step in driving Small and Medium Enterprises (SME) development through strategic partnerships.

“Recently, we signed a Memorandum of Understanding (MOU) with your esteemed associations.

Advertisement
“This agreement underscores a simple truth that we cannot transform Nigeria’s industrial landscape alone.

“The journey to sustainable economic growth must be fueled by collaboration, innovation, and a shared resolve to address systemic challenges,” he said.

Advertisement
The BOI MD said that under the signed agreement, the bank had already begun making strides through joint efforts on the Federal Government’s loans programme.

He said that the event, with the theme, “Driving SME Development through Strategic Partnerships” challenged everyone to reimagine how we work together.

Olusi said in practice, this meant shared responsibility as the bank’s role was not only to provide financing but also to support an enabling environment for businesses to thrive.

“This includes addressing infrastructure gaps, regulatory bottlenecks, and access to markets.

Advertisement
“However, your expertise and insights are essential to inform these efforts.

“On collaborative innovation, we must work together to introduce technology, sustainability, and skills development as core pillars of SME growth.

Advertisement
“We are concerned about your most pressing challenges, your operations, how we can further align our programmes with your needs and the innovative solutions we can pursue together to accelerate growth,” he said.

Olusi urged the organised private sector to keep in mind the six thematic areas of impact that BOI was focused on in line with President Bola Ahmed Tinubu’s renewed Hope Agenda.

He listed them to include MSME development, digital transformation, youth and skills development, climate and sustainability, gender inclusion and sectoral growth.

“These are not just BOI’s priorities; they are national imperatives and they require your active participation to succeed.

“The Bank of Industry stands as your partner in progress, ready to support at every step of the way as together we have the potential to transform Nigeria’s economic landscape,” he said.