China urges Nigeria to make use of currency swap deal signed last year

The government of Nigeria has been suggested to utilize the currency swap agreement with China to strengthen Naira, its local currency. The currency swap deal was already signed by China and Nigeria last year to ensure the enhancement of commercial ties and reduction of the requirement to utilize dollar in bilateral trade.

Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria, made the call in Lagos, Nigeria's economic hub on Tuesday, May 21. The businessman advised the apex bank to deepen currency swap pact with China and diversify commodity exports to the U.S. in order to diversify foreign exchange earnings for the country.

Nigeria must glue its eye on diversifying its foreign exchange earnings through the promotion of Diaspora remittances for economic buffer and foreign reserves accretion, he added, as reported by Xinhua.

China's central bank inked a currency swap agreement with its counterpart in Nigeria in April last year. A total of 15 billion yuan (around USD 2.17 billion) for 720 billion Nigerian nairas, or vice versa, will be swapped in three years.

Last year, Yi Gang, governor of the People's Bank of China, and Godwin Emefiele, his Nigerian counterpart, said (after signing three-year swap in April 2018) said that the transaction could be renewed if both the parties want.

The deal can be extended by mutual consent, which made Nigeria the third country in Africa, after South Africa and Egypt, to sign such a deal with China. Nigeria is also the first African country to accept Chinese renminbi (RMB) in its foreign reserve.

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