LAGOS/Nigeria: The Central Bank of Nigeria (CBN) has described the Nigeria-China currency swap deal as a transformative policy that could slash shipping costs, boost trade efficiency, and ease foreign exchange pressure in Nigeria’s maritime industry.
Speaking at a stakeholders’ breakfast meeting organised by the Maritime Reporters’ Association of Nigeria (MARAN) in Lagos, CBN Governor, Mr. Olayemi Cardoso, said the agreement enables Nigerian and Chinese businesses to conduct trade directly in naira and yuan, bypassing reliance on the U.S. dollar.
Cardoso, represented by his Special Adviser on Finance and Strategy, Mr. Anthony Ogufere, explained that the swap deal, initially signed in 2018 and renewed in December 2024, simplifies the settlement of trade transactions in local currencies while reducing pressure on Nigeria’s dollar reserves.
“The swap agreement lowers the cost of doing business and enhances the competitiveness of Nigerian trade,” Cardoso said.
He highlighted that China had emerged as Nigeria’s largest trading partner by the end of 2024, accounting for about 35% of total imports with a trade volume of $11.58 billion. He added that the maritime sector, which handles most of Nigeria’s import and export activities, stands to benefit immensely from faster port clearance, improved trade finance instruments, and direct shipping links such as the Lekki Deep Sea Port, a Chinese-backed project under the Belt and Road Initiative.
However, the CBN governor acknowledged that challenges remain. He cited Nigeria’s significant trade imbalance with China and the limited adoption of Yuan-denominated transactions among Nigerian businesses as key obstacles. Cardoso called for greater sensitisation, policy coordination, and efforts to boost non-oil exports to China.
Also speaking at the event, Mr. Martins Olajide, a representative of the Nigeria-China Strategic Partnership, presented a more cautious view. While agreeing that the swap deal offers short-term relief and smoother trade, Olajide warned that it does not provide a sustainable solution to the naira’s persistent depreciation.
Describing the agreement as “swapization,” Olajide cautioned that Nigeria’s heavy dependence on imports, particularly from China, could undermine the long-term impact of the deal. He emphasized the urgent need for structural reforms in industrialisation, value addition, and local production.
“Without these changes, the swap deal may only reinforce economic dependence on China without solving the underlying issues,” Olajide said.
In his opening remarks, the Chairman of the event and Chairman of the Customs Consultative Council (CCC), Aare Akeem Olarenwaju, decried the volatility of the naira-dollar exchange rate as a major driver of rising costs in Nigeria.
“You can’t determine the price of goods within a few hours due to constant exchange rate changes. Today it’s ₦1,600 to a dollar; the next few hours, it could be ₦1,700 or ₦1,500. It’s the common people who suffer the most,” Olarenwaju lamented.
He commended the organisers for creating a platform to discuss trade, currency alternatives, and maritime development, urging media professionals to educate the public on options like the Chinese yuan to ease dollar dependence.
Earlier, MARAN President, Mr. Godfrey Bivbere, reaffirmed the association’s commitment to promoting critical dialogue on economic issues. While acknowledging the swap deal’s promise in reducing transaction costs and enhancing trade efficiency, Bivbere stressed the importance of balanced discourse.
“We are not only here to applaud progress but also to interrogate policy. We must understand both the positive impact and the underlying risks associated with China’s expanding economic footprint in Nigeria,” Bivbere said.
He urged stakeholders across the maritime, trade, and financial sectors to approach the Nigeria-China currency swap critically, noting that sustainable benefits would only come through policies that protect national economic interests while encouraging growth and competitiveness.
