…Stakeholders Caution on Long-Term Implications
The Central Bank of Nigeria (CBN) has brought to the fore the gains of the Nigeria and the People’s Republic of China currency swap deal.
It described it as a transformative policy instrument that could significantly reduce shipping costs, enhance trade efficiency, and ease foreign exchange pressure in Nigeria’s maritime industry.
The CBN Governor, Mr. Olayemi Cardoso who stated this at a stakeholders’ breakfast meeting organized by the Maritime Reporters’ Association of Nigeria (MARAN) in Lagos Tuesday stated that the agreement—originally signed in 2018 and recently renewed in December 2024—enables Nigerian and Chinese businesses to conduct trade directly in naira and renminbi, bypassing the United States of America (USA) dollar.
His words: “The swap agreement simplifies the settlement of trade transactions in local currencies and reduces the pressure on Nigeria’s dollar reserves. This, in turn, lowers the cost of doing business and enhances the competitiveness of Nigerian trade.”
Cardososo who was represented at the occasion by his Special Adviser on Finance and Strategy, Mr. Anthony Ogufere noted that China had become Nigeria’s largest trading partner by the end of 2024, accounting for about 35% of total imports and reaching a trade volume of $11.58 billion.
According to him, the maritime sector which handles the majority of Nigeria’s import and export activities, stands to benefit immensely through faster port clearance, improved trade finance instruments, and direct shipping links such as the Lekki Deep Sea Port—a Chinese-backed infrastructure project under the Belt and Road Initiative.
The CBN helmsman however admitted that several challenges still hinder the full potential of the currency swap framework.
These include Nigeria’s significant trade imbalance with China and the limited adoption of Yuan denominated transactions by Nigerian businesses.
He called for greater sensitization, policy coordination, and efforts to expand non-oil exports to China.
The Director General, Nigeria-China Strategic Partnership (NCSP), Dr. Joseph Olasunkanmi Tegbe in his paper offered a more cautious outlook at the currency swap deal.
Tegbe who was represented at the event by NCSP Head of Operations, Mr. Martins Olajide noted that while the swap deal provides short-term relief and smoother trade operations, it is not a sustainable solution to the naira’s persistent depreciation.
Describing the swap arrangement as “swapization,” Tegbe warned that Nigeria’s economic vulnerability and dependence on imports—especially from China—undermines the true impact of the agreement.
He emphasized the need for what he called “structural reforms”, particularly in industrialization, value addition, and local productions of goods.
According to him, without these changes, the swap deal may only reinforce economic dependence on China without solving the underlying issues it seeks to address in Nigeria’s economy.
The Chairman of the occasion, Aare Akeem Olanrenwaju had earlier in his opening remarks decried the volatility of the naira-dollar exchange rate as a major cause of the skyrocketing cost of goods in Nigeria.
Olanrewaju who is also the Chairman, Customs Consultative Council (CCC) called for greater public awareness of alternative currency options like the Chinese Yuan.
His words: “You cannot determine the price of goods within a few hours due to constant exchange rate changes. Today it is ₦1,600 to a dollar, and in the next few hours, it could be ₦1,700 or ₦1,500. It is the end users and the common people who suffer the most.”
Olanrewaju who was the pioneer Vice Chairman of the Governing Council, Council for Regulation of Freight Forwarding in Nigeria (CRFFN) lauded members of MARAN for organizing the breakfast.
He pointed out that the breakfast meeting has provided an opportunity to open up conversations around trade, currency, and maritime developments in the country.
He also enjoined media practitioners to help educate the public on alternatives that could reduce the nation’s dependence on the U.S. dollar.
The President of MARAN, Mr. Godfrey Bivbere in his welcome address reiterated the association’s commitment to promoting dialogue on key economic issues in the country.
He acknowledged that the swap deal promise to reduce transaction costs and enhancing trade efficiency just as he called for a balance discourse on the matter.
His words: “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.”
The MARAN President, enjoined stakeholders across the maritime, trade, and financial sectors to approach the Nigeria-China currency swap with critical insight just as he noted that sustainable benefits would only come through policies that protect national economic interests while encouraging growth and competitiveness.
