President Bola Ahmed Tinubu has called on the Chinese government to expand its currency swap deal with Nigeria as part of efforts to strengthen the country’s economy and ease trade transactions. The request came during a bilateral meeting between Tinubu and Chinese officials, where both parties discussed enhancing economic cooperation to address Nigeria’s foreign exchange challenges. Tinubu emphasized the importance of reducing Nigeria’s reliance on the U.S. dollar in trade with China, one of Nigeria’s largest trading partners.
The currency swap agreement, first introduced in 2018, allows Nigeria to use the Chinese yuan for trade transactions with China, reducing the demand for dollars and easing pressure on Nigeria’s foreign reserves. However, Tinubu noted that the current agreement needs to be expanded to better meet Nigeria’s growing trade needs. He highlighted that a stronger currency swap deal would help stabilize Nigeria’s naira, which has faced significant depreciation due to forex shortages.
Tinubu pointed out that increasing the swap deal would also encourage more Nigerian businesses to trade directly with Chinese companies without converting to dollars. This move, he said, would lower transaction costs, reduce forex risks, and promote smoother trade relations. Additionally, he expressed optimism that expanding the agreement would encourage more Chinese investments in Nigeria’s key sectors, including infrastructure, agriculture, and manufacturing.
In response, Chinese officials reportedly expressed willingness to explore the proposal. They acknowledged Nigeria’s position as a key partner in Africa and recognized the potential benefits of deepening financial ties. The Chinese government sees the swap deal as a means of promoting the yuan as a global currency and facilitating bilateral trade with African nations.
The request to increase the currency swap deal comes as part of Tinubu’s broader economic reform agenda aimed at addressing Nigeria’s economic challenges. His administration has been focused on securing international partnerships to revitalize the country’s economy, reduce dependency on foreign loans, and boost foreign exchange reserves. The expansion of the swap deal could provide Nigeria with much-needed financial relief and foster stronger economic ties with China.
