…immigration policy likely to be more favourable

…foreign aid projected to remain at current level

The Labour Party takeover in the United Kingdom has elicited discourse among analysts on how the development will impact Nigeria-UK relations, particularly in the areas of trade, immigration, jobs, education, and development assistance.

The discourse comes in handy as The Nigerian Observer’s analysis of Nigeria’s major macroeconomic indicators shows the United Kingdom is one of the major sources of boom-and-bust cycle for Africa’s most populous nation in view of the UK being a major destination for the country’s exports and a source of imports.

The general elections held in the UK last week ushered in the Labour Party led by Keir Starmer, the new British Prime Minister. His party won 412 seats, far more than 326 seats needed to form a new government. The Conservative Party led by Rishi Sunak secured just 121 seats.

Nigeria and the UK have enjoyed robust trade relations over the years. According to the foreign trade data sourced from the National Bureau of Statistics (NBS), Nigeria exported N310.16 billion worth of goods to the UK in 2020; N448.58 billion in 2021; N533.31 billion in 2022; N1.41 trillion in 2023, and N268.11 billion during the first quarter of 2024.

On the import segment, Nigeria imported N282.15 billion worth of goods from the UK in 2020; N326.05 billion in 2021; N574.40 billion in 2022; N688.19 billion in 2023, and N183.34 billion in the first quarter of this year.

From 2020 to the end of the first quarter of 2024, Nigeria recorded a positive trade balance of N915.14 billion with the UK government, showing robust UK relations with Africa’s biggest economy.

Another major metric is capital importation. Out of the $23.99 billion capital imported into Nigeria in 2019, a total of $11.01 billion, representing 46 per cent, was imported from the UK. In 2020, investors imported $4.17 billion capital from the UK into this country, out of the total $9.66 billion capital imported into Nigeria, representing 43 per cent. In 2021, it was $2.29 billion out of $6.70 billion, representing 34 per cent of the total capital imported into Nigeria from the UK.

The share of capital imported from the UK into Nigeria stood at 52 per cent in 2022; 29 per cent in 2023, and 53 per cent in Q1 2024.

The UK was the second-highest source of remittances into Nigeria. The remittances data from Stata indicates that in 2021, $2.76 billion worth of remittances came into Nigeria from the UK.

In education, the UK also serves as a major destination for Nigerians in search of further educational pursuits overseas. Available data indicates that 141,000 Nigerians relocated to the UK between June 2022 and 2023, making Nigerians the second-largest non-EU immigrants in that country.

The UK is also a source of robust development financial assistance and scholarships such as the Chevening scholarship. In 2023 alone, the UK provided humanitarian assistance worth at least £38 million to Nigeria’s North-East geopolitical zone.

With Nigeria’s leading banks such as Access Bank, Zenith, UBA, First Bank, GTB and FCMB having subsidiaries in the UK, the extent of the economic interconnectedness of the two nations has gone beyond the ordinary, making any moves in either of the two countries to be of interest to the other party.

Against this backdrop, a change in government in the UK warrants attention from Nigeria’s policymakers in order to get the best out of the potential policy changes the new government might implement.

The Nigerian Observer team finds mixed results in the analysis of the potential programmes to be implemented by the new UK government. This is because while some Nigerians are optimistic, especially in the area of positive immigration policies, other findings show the new UK Labour government might not change some policies of the last Conservative government. A case in point is their position on the Ukraine-Russia war.

“Historically, Labour has been more open to immigration than the Conservatives. They might introduce policies that could make it easier for skilled workers from countries like Nigeria to immigrate to the UK. However, they would still likely maintain controls on immigration,” Misbau Alamu Lateef, a lecturer at the University of Hull, UK, said.

“Labour typically focuses on employment opportunities, workers’ rights and job creation. This could potentially create more employment opportunities, which might benefit Nigerians living and working in the UK. However, the specifics would depend on the exact policies implemented,” he added.

Another Nigerian in the UK is upbeat that the Labour victory could signal the strengthening of the Commonwealth, with Nigeria and Nigerians in the UK in a good position to benefit from such moves.

“Labour victory could lead to stronger UK-Nigeria relations and positive changes for Nigerians living in the UK. Progressive immigration policies, improved workers’ rights, and better access to social services are some of the potential benefits that could arise from a Labour government, fostering a more inclusive and supportive environment for the Nigerian community in the UK,” said Banwo Afolagbade of the UK Department for Work and Pensions.

However, the Centre for Democracy & Development (CDD-West Africa) is of the view that there might not be much change in the new Labour government’s policies, particularly in the area of development financing. CDD anchored its arguments on the merger of the UK’s government ministry responsible for international development with the Foreign Office in 2020 which reduced foreign aid from 0.7 per cent to 0.5 per cent of UK’s Gross National Income, slashing development finance funding for developing countries.

“Earlier in 2022, Keir Starmer appeared bullish about reversing the merger. But in 2023, amid a series of policy shifts, the Labour Party hinted at considering keeping the merger within the Foreign Office. David Lammy, widely expected to be Foreign Secretary, acknowledges the challenges posed by the merger but still believes that the two departments were more successful when working together,” CDD said.