China’s central bank, the People’s Bank of China, has extended its currency swap agreement with the Central Bank of Nigeria, a deal now worth N3.28 trillion or 15 billion yuan, equating to $2.09 billion.
This renewal comes six years after the original agreement was struck.
The updated arrangement, announced via a statement on China’s central bank website, will last three years with the possibility of further extension. The deal aims to enhance financial collaboration between the two nations, encourage the use of their respective currencies, and simplify trade and investment transactions.
Under the agreement, naira liquidity will be available to Chinese businesses, while Nigerian enterprises gain access to yuan liquidity. This mechanism is designed to reduce reliance on the dollar for bilateral trade. Originally introduced in 2018, the agreement sought to address dollar scarcity in Nigeria at the time.
With the renewed deal, the use of both naira and yuan is expected to grow in commercial exchanges, solidifying financial ties between the nations. China remains Nigeria’s largest trading partner, sourcing crude oil, petroleum gas, and lead ore from Nigeria while supplying vehicles, electronics, and other goods to the country.
In 2023, Nigeria’s imports from China totalled $11.2 billion, while exports to China amounted to $2.4 billion. Vice President Kashim Shettima revealed that total trade volume between the two nations reached $22.6 billion that year.
During a meeting at the Presidential Villa in November with a Chinese delegation led by Zhang Qingwei, Vice Chairman of the Standing Committee of the Chinese National People’s Congress, Shettima noted that trade relations are expanding annually at a rate of 33 per cent.
China has emerged as one of Nigeria’s most significant development allies, financing several major infrastructure initiatives in the country. The partnership has recently pivoted towards renewable energy, smart city projects, and critical infrastructure developments.
