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Nigeria, China working to expand $2.5 billion currency swap deal



Nigeria, China working to expand $2.5 billion currency swap deal
Nigerian President, Muhammadu Buhari and Chinese President, XI Jinping

The Chinese Ambassador to Nigeria, Mr Cui Jianchun, has said that his country is working with Nigerian authorities to expand the $2.5 billion currency swap deal between them.

In a drive to further boost bilateral economic growth, the two countries on May 3, 2018 signed an agreement to exchange N720 billion for RMB15 billion as at the time.

Responding to questions from journalists on the success of the currency swap between the two countries at a news conference in Abuja on Tuesday, Jianchun explained that the framework for the N750 billion initiative was being expanded by the Chinese and Nigerian central banks.

The envoy said: “The agreement is being implemented by the two central banks; the framework would be expanded. I believe it is already working and I am working to have Chinese banks here in Nigeria and also for Nigerian banks to operate in China.”

Jianchun, who said the Chinese government was desirous of having closer collaboration between the Chinese lawmakers and their Nigerian counterparts, said the eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) will be held in Senegal in late November.

He said since its establishment over 21 years ago, FOCAC has bolstered high-level interactions and political trust between China and Africa, delivering a leap in Sino-Africa relations.

Jianchun said: “FOCAC has now turned itself into a pacesetter for cooperation with Africa and a fine example of mutually beneficial cooperation in the world.

“Africa and China have stepped up mutual support on issues involving each other’s core interests and major concerns, work together for greater democracy in international relations, stay committed to multilateralism and align global governance reforms with the common interests of developing countries.”

Trades Between Nigeria and China

Although, experts have bemoaned poor execution of the currency swap deal, trades between the two countries continues to blossom.

Business Metrics can report that in July 2021, Nigeria imports from China stood at $2.07 billion while export was $457 million, resulting in a negative trade balance of $1.61 billion, according to official data obtained from the Observatory Economic Complexity (OEC).

Between July 2020 and July 2021, the imports from China have increased by $466 billion or 29.1 per cent from $1.6 billion to $2.07 billion, while exports to China increased by $12.8 million or 2.88 per cent from $444 million to $457 million.

In July this year, the top imports from China to Nigeria were Non-Knit Women’s Suits ($158 million), Light Pure Woven Cotton ($105 million), Synthetic Filament Yarn Woven Fabric ($98.8 million), Fake Hair ($72 million), and Rubber Footwear ($58.9 million).

In the same month, the top exports of Nigeria to China were Crude Petroleum which stood at $249 million, Petroleum Gas ($172 million), Lead Ore ($7.42 million), Zinc Ore ($4.35 million), and Raw Aluminium worth $4.19 million.

Nigeria and China established formal diplomatic relations on February 10, 1971. Relations between the two nations grew closer as a result of the international isolation and Western condemnation of Nigeria’s military regimes (1970-1998).

Nigeria has since become an important source of oil and petroleum for China’s rapidly growing economy; and Nigeria is looking to China for help in achieving high economic growth.

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