China’s central bank announced yesterday the renewal of a bilateral currency swap agreement with the Central Bank of Nigeria (CBN), a strategic move aimed at strengthening trade and financial ties between the two nations.
According to a statement from the People’s Bank of China, the renewed agreement is valued at N3.28 trillion (15 billion yuan or approximately $2.09 billion) and will remain in effect for three years, with the possibility of renewal upon mutual agreement. The announcement, reported by China’s Xinhua News, highlights the growing economic cooperation between the two countries.
The agreement, originally signed in 2018 during the tenure of former CBN Governor Godwin Emefiele, is designed to provide local currency liquidity to Nigerian and Chinese businesses, easing reliance on third-party currencies like the U.S. dollar. It facilitates smoother transactions, promotes trade and investment, and strengthens financial stability.
Key benefits of the arrangement include providing naira liquidity for Chinese enterprises and renminbi (RMB) liquidity for Nigerian businesses, thus enhancing transaction speed and efficiency. It also supports foreign exchange reserves management in both countries and fosters broader economic collaboration.
Vice-President Kashim Shettima recently commended the increasing trade volume between Nigeria and China, describing it as one of the highest in Africa. During a meeting with a Chinese delegation led by Mr. Zhang Qingwei, Vice-Chairman of the Standing Committee of the National People’s Congress, Shettima noted that trade relations between the two nations reached $22.6 billion in 2023, representing a 33% annual growth rate.
“Nigeria’s economy is picking up, and despite challenges, our business relationship with China continues to thrive,” Shettima said. “We believe in you, we respect you, and we cherish our relationship.”
The currency swap agreement is expected to further cement this partnership, boosting trade volumes and enhancing economic stability between the two countries.
