Nigeria, China strengthen economic ties with $2bn currency-swap renewal

Nigeria and China have renewed a 15 billion yuan ($2 billion) currency-swap deal aimed at boosting trade, investment, and financial collaboration between the two nations.

The agreement, which will remain valid for three years with the possibility of renewal, is expected to enhance the direct use of the yuan and naira in cross-border transactions. This reduces dependency on third-party currencies, such as the US dollar, according to the People’s Bank of China (PBoC).

Originally signed in May 2018, the currency-swap framework was initiated to facilitate trade by allowing businesses in both countries to access local currencies directly. The Central Bank of Nigeria (CBN) and the PBoC had agreed on a deal worth RMB 16 billion ($2.5 billion) at the time, with the goal of simplifying transactions and supporting industrialists.

In a statement, the PBoC emphasized the broader benefits of the agreement: This agreement will provide naira liquidity to Chinese businesses and RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience, and volume of transactions between the two countries.”

The renewed pact follows a meeting in September between Nigerian President Bola Tinubu and Chinese President Xi Jinping. During the discussions, both leaders reaffirmed their commitment to fostering regional financial cooperation, including currency swaps, as a tool to streamline bilateral trade.

With trade between the two nations accounting for nearly 30 per cent of Nigeria’s total trade volume, the deal underlines the strategic importance of Sino-Nigerian relations. The collaboration also extends to global financial stability, with a focus on combating financial crimes such as money laundering and terrorism financing.

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