Nigeria and China have agreed to revive their local currency swap deal, initially established in 2018.
This understanding was part of a broader consensus reached during President Bola Tinubu’s official visit to China, where he met with Chinese President Xi Jinping.
The discussions focused on enhancing economic cooperation, particularly through regional monetary initiatives like the local currency swap, which aims to facilitate trade between the two nations while contributing to global financial stability.
The local currency swap deal, signed in 2018 between the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC), was valued at $2.4 billion.
The agreement was designed to ease the burden on Nigeria’s foreign exchange reserves by allowing businesses to transact in Chinese Yuan instead of U.S. dollars, thereby reducing the pressure on Nigeria’s Naira.
However, the implementation of the swap faced challenges, largely due to trade imbalances between Nigeria and China.
The revival of this agreement comes at a critical time as Nigeria seeks to diversify its economy and reduce its dependency on oil exports.
The deal is expected to not only facilitate smoother trade transactions but also help stabilize the Naira against global currencies, particularly the U.S. dollar.
In addition to the currency swap, both countries agreed to collaborate on financial intelligence, particularly in areas concerning anti-money laundering (AML) and countering the financing of terrorism (CFT).
This cooperation is aimed at safeguarding the financial and foreign exchange markets in Nigeria while cracking down on financial crimes, including money laundering.
The agreements also highlighted the importance of enhancing relations at the sub-national level, with both countries committing to establish more friendly ties between Nigerian states and Chinese provinces.
This move is expected to deepen cooperation across various sectors, including agriculture, infrastructure, and technology.
President Tinubu and President Xi emphasized the importance of Nigeria’s geographical and developmental advantage in West Africa, recognizing its potential as a hub for Africa’s flagship projects on cross-national and cross-regional cooperation.
The meeting between the two leaders resulted in the decision to elevate the China-Nigeria relationship to a Comprehensive Strategic Partnership.
This upgraded status reflects the growing importance of bilateral ties, particularly as both countries are significant representatives of major developing nations and emerging economies.
The partnership aims to propel China-Africa relations into a new era of cooperation, with Nigeria playing a leading role in the Global South’s collective progress.
The joint statement issued after the meeting noted that both countries have embarked on a path of “seeking strength through unity for win-win cooperation,” reaffirming their firm support for each other on issues related to sovereignty, territorial integrity, and major national concerns.
China expressed strong support for Nigeria’s Renewed Hope Agenda, which focuses on maintaining national unity, peace, security, and social stability while promoting economic development and improving the welfare of its people.
This support aligns with Nigeria’s domestic policy goals and its broader vision of achieving sustainable development and economic growth.
In turn, Nigeria reaffirmed its commitment to the one-China principle, acknowledging that there is only one China, and that Taiwan is an inalienable part of Chinese territory.
Both leaders praised the role of the Forum on China-Africa Cooperation (FOCAC) in enhancing the quality of cooperation between China and Africa over the past 24 years.
They agreed that the successful convening of the 2024 Beijing Summit of FOCAC marks a new chapter of unity and collaboration between China and Africa.
