Nigeria, Indonesia firms sign defence deal, target $6bn trade

Nigeria and Indonesia have signed a letter of agreement and memorandum of understanding for the representation of Indonesian state-owned defence manufacturer, PT Pindad, in Nigeria.

The move is aimed at promoting local production of defence equipment and strengthening bilateral security cooperation.

The agreement was signed on Friday, on the sidelines of the 41st Trade Expo Indonesia in Jakarta by a Nigerian delegation led by the Deputy Chairman of the House of Representatives Committee on the National Agency for Food and Drug Administration and Control, Uchenna Okonkwo.

Okonkwo, who represents Idemili North and South Federal Constituency in the House of Representatives, said the partnership would open opportunities for local manufacturing of defence equipment in collaboration with the Defence Industries Corporation of Nigeria.

Speaking during an interview at the expo, he said the arrangement was intended to address equipment gaps facing Nigeria’s armed forces and improve the country’s capacity to respond to security threats.

“Pindad is the government state-owned institution that deals with defence tools, defence artilleries, defence intelligence, ammunitions, vehicles, and also construction equipment.

“What this will do is that it opens up avenues for local manufacture of defence items, of course, in partnership with our entity, which is the Defence Industry Company of Nigeria, DICON,” Okonkwo said.

He added, “As you know, we have been pursuing this for quite a while, and one of the reasons why we pursue this is because of the issues which we face, insecurity issues.

“Of which our equipment are not fit and suitable for our armed forces, and we want to be able to bridge that gap.”

According to him, the proposed cooperation would extend beyond manufacturing to include training Nigerian personnel to operate the equipment.

“We look forward to going to the next step of our cooperation between Nigeria and Indonesia when it comes to arms, ammunition, defence tools, manufacturing locally, and also personnel training on how to use these tools,” Okonkwo said.

He said the agreement was particularly relevant as Nigeria continued to consider measures to strengthen security arrangements, including state policing.

The lawmaker also disclosed that the Nigerian delegation had discussed ways to expand trade and investment with Indonesian government officials and private-sector stakeholders during a business forum organised by the Indonesian Embassy in Abuja.

He said both countries were working towards increasing their annual trade volume to at least `$6bn, adding that improved cooperation, transparency and access to market information would be important to achieving the target.

“And we were able to discuss quite a lot and show our strategy on how we can be able to grow the trade volume between Nigeria and Indonesia from what it is now to a target of nothing less than $6 billion per annum,” he said.

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Okonkwo said the partnership could attract foreign direct investment into Nigeria and create opportunities for local industries.

He urged the Nigerian government, businesses and other stakeholders to support initiatives aimed at deepening economic relations between the two countries.

On concerns raised by Indonesian stakeholders about difficulties in accessing funds and processing payments in Nigeria, the lawmaker called for a digital payment gateway linking businesses in both countries.

He said the system could make cross-border transactions easier for exporters and importers, reducing difficulties associated with paying for goods and receiving proceeds from international trade.

“Payment solutions have evolved. Artificial intelligence have evolved. And, of course, everybody is online now. So everything about digitalisation should be taken as a premier source or solution to be able to answer these payment solutions,” he said.

Okonkwo cited Nigerian fintech platforms, including Paystack and Moniepoint, as examples of local payment solutions that could inform the development of a cross-border system.

“What I’m proposing is that let’s have a payment gateway between Indonesia and Nigeria.

“Let’s get the opportunity for there to be partnership between Indonesia, whether government or whether private, to partner with Nigeria and then come up with, you know, what may be an app, come up with a system that would say ease, that would create ease, you know, towards making payments,” he said.

He added that such a platform would enable buyers to pay for goods more easily and allow suppliers to receive payments, potentially encouraging greater participation in bilateral trade.

The lawmaker said the initiative could be pursued with the support of the Central Bank of Nigeria and commercial banks, while the Nigerian-Indonesian Business Group would be willing to support efforts to identify suitable partners.

“So I think that that solution is very, very key. And right now is the time for someone to take it up and pick it up,” Okonkwo said.

The 41st Trade Expo Indonesia brings together exporters, buyers and investors to explore commercial opportunities across sectors, including manufacturing, agriculture, food and beverages, and services.

The defence agreement and proposed payment gateway form part of broader efforts to expand Nigeria-Indonesia cooperation beyond traditional trade into industrial development, investment and technology transfer.