January 10, 2025
The proposal to raise the subsisting $2 billion currency swap deal between Nigeria and China, now has a preliminary agreement.
The move to scal up the deal from $2 billion or 15 billion yuan was initiated by President Bola Tinubu during discussion with Chinese Foreign Affairs Minister Wang Yi at the State House in Abuja.
The deal, was initially signed in 2018, to facilitate trades between the two nations by allowing transactions directly in the Chinese yuan and the Naira.
The agreement renewal was to enhance trade and investment.
President Tinubu, had insisted that increasing the level of currency swaps will speed up the infrastructural development and deepen the strategic bilateral relations between the countries.
He also solicited for the upward review of the $50 billion aid package for Africa, that was announced last year by China’s President Xi Jinping.
Tinubu said: “We still demand more in the area of currency swap. The level you have approved as a government for Nigeria is inadequate, considering our programme. If you can increase that, it will be well appreciated. Our bond should grow stronger and become unbreakable”.
The President maintained that African infrastructural deficit required more commitment and called for a review of the $50 billion aid package to reflect the continent’s need.
He said: “I am happy you are part of China’s highest decision-making body. We will want you to use your position to influence improved project funding. First, I say yes to the $50 billion support, and thank you for contributing to African growth.
“The infrastructural needs of Africa are greater than that, and we want to move as rapidly as our other counterparts. All share your vision of rapid development. Africa values the relationship with China, and we seek deeper collaboration for infrastructural development.”
The president also solicited China’s support in Nigeria’s bid for a permanent United Nations Security Council seat.
He said: “You are a member of the UN Security Council. We want you to use your influence to ensure Nigeria secures the seat.”
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President Tinubu, appreciated his China counterpart for his reception during a state visit, noting that the Chinese Foreign Affairs Minister, Wang Yi could not have visited at a better time.
“It is good that you came at such a critical time. My visit to China was a good experience. Once again, accept my sympathy for the earthquake in Tibet. It was a natural disaster that nobody expected. We commend your government for the rapid reaction to protect lives.”
For his remarks, the Chinese Foreign Affairs Minister Wang Yi, said the currency swap agreement and potential bond issuance would bolster Nigeria’s revenue, enhance safety, and deepen bilateral ties of both countries.
He said: “The currency swap agreement shows how well we have carried out our financial cooperation and sustained its momentum. About Nigeria’s wish to increase the line of the currency swap, we will favourably study and consider the issue. Our cooperation is going well in many ways, especially in finance.”
Yi, also considered Nigeria’s plan to issue Panda bonds, a type of renminbi-denominated bond issued by non-Chinese entities in China’s domestic market.
He added: “We welcome Nigeria to issue Panda bonds in China because we have full confidence in Nigeria’s credibility. By issuing Panda bonds, Nigeria will gain good revenue, and safety is guaranteed through financial support”.
Yi emphasized China’s commitment to investment in Nigeria’s infrastructure development, particularly in the railway.
