Nigeria, China Renew N3.28trn Currency Swap Agreement to Boost Bilateral Trade

Nume Ekeghe

China’s central bank yesterday revealed that it has renewed a bilateral currency swap agreement with the Central Bank of Nigeria (CBN) as part of efforts to boost trade between both countries.
The total value of the agreement was N3.28 trillion (15 billion yuan or about $2.09 billion), China’s Xinhua News quoted the People’s Bank of China to have revealed this in a statement on its website.

The agreement is valid for three years and could be renewed upon mutual consent, according to the statement.
It said that the renewal of the currency swap arrangement would strengthen financial cooperation between China and Nigeria, expand the use of the two currencies, and promote and facilitate bilateral trade and investment.
The currency swap agreement was signed by both countries in 2018, when Mr. Godwin Emefiele was the CBN Governor.

The transaction was aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby reducing the difficulties encountered in the search for third currencies.  Among other benefits, the agreement was expected to provide naira liquidity to Chinese businesses and provide RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience and volume of transactions between the two countries.

It was also expected to assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.
Vice-President Kashim Shettima recently expressed satisfaction with the continuous increase in the volume of trade between Nigeria and China, saying it was one of the highest in Africa.
He had therefore called for constant improvement of relations between the two nations, maintaining that the two countries are friends that have sustained mutual respect and honour for each other.

Shettima made this known when he played host to a delegation from China led by the Vice-Chairman of the Standing Committee of the National People’s Congress, Mr. Zhang Qingwei, recently.
Expressing satisfaction with the volume of trade between Nigeria and China, the vice-president had said: “Last year in 2023, our trade relations with China got to $22.6 billion, one of the highest in Africa, if not the highest, and that trade relationship is growing by 33 percent every year.

“Mind you, the Nigerian economy is picking up but that did not stop our business relationship with China. So, I want to reassure you that we will support you in whatever way we can. We believe in you, we respect you and we cherish our relationship.”