China’s central bank, the People’s Bank of China (PBOC), has renewed its bilateral currency swap agreement with the Central Bank of Nigeria (CBN) to the tune of N3.28 trillion (15 billion yuan), an equivalent of $2.09 billion.
According to a statement published on the PBOC’s website, the agreement, valid for three years, can be renewed upon mutual consent.
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The statement emphasized that the renewal aims to strengthen financial cooperation between both nations, expand the use of their respective currencies, and enhance bilateral trade and investment.
The currency swap arrangement provides naira liquidity to Chinese businesses and yuan liquidity to Nigerian businesses, reducing reliance on the dollar for trade transactions. Originally signed in April 2018 for three years, the agreement was introduced to address dollar shortages in Nigeria.
The renewed deal is expected to facilitate smoother business transactions using the naira and yuan, bolstering financial ties between the two economies. As Nigeria’s largest trading partner, China imports crude oil, petroleum gas, and lead ore from Nigeria, while Nigeria imports manufactured goods such as vehicles and electronics from China.
In 2023, Nigeria imported $11.2 billion worth of goods and services from China, while exports to the Asian nation stood at $2.4 billion. The total trade volume between the two countries reached $22.6 billion in the same year, according to Vice President Kashim Shettima.
Speaking at the Presidential Villa in November while hosting a Chinese delegation led by Mr. Zhang Qingwei, Vice Chairman of the Standing Committee of the Chinese National People’s Congress, Shettima highlighted the steady annual growth of the trade relationship by 33 percent.
“China remains one of Nigeria’s most significant development partners, with key infrastructure projects and initiatives in renewable energy, smart city development, and critical infrastructure funded through collaborations between both countries,” Shettima stated.
