China Backs Nigeria’s Request to Increase Currency Swap Deal

The People’s Republic of China has confirmed its willingness to review Nigeria’s request to expand the existing bilateral currency swap agreement.

This update was shared by China’s Foreign Minister, Wang Yi, during a briefing with State House Correspondents following his meeting with President Bola Tinubu at the Aso Rock Villa, Abuja, on Thursday.

The currency swap, initially signed in 2018 between the People’s Bank of China and the Central Bank of Nigeria, was valued at CN¥15 billion, which amounted to approximately N720 billion (roughly US$2.5 billion at the time). The deal was designed to reduce Nigeria’s dependence on the US dollar, stabilize its foreign reserves, and foster increased trade and investments between the two countries.

Wang Yi emphasized the positive momentum in financial relations between the two nations and invited Nigeria to explore opportunities in issuing Panda bonds in China. Panda bonds are renminbi-denominated bonds that allow foreign entities to raise capital within China’s domestic bond market. This move would provide Nigeria with a direct channel to China’s liquidity and investor base, offering a diversified funding source and protection against exchange rate risks.

He further explained that issuing Panda bonds could provide Nigeria with additional revenue streams to support infrastructure projects, such as the modernization of the country’s railway system.

Wang Yi said, “We are pleased with the ongoing cooperation, and regarding Nigeria’s interest in increasing the currency swap agreement, we will give it favorable consideration. Nigeria is also invited to issue Panda bonds, as we have full confidence in its economic credibility.”

Additionally, China’s financial backing has supported Phase III of Nigeria’s railway modernization, a tangible example of the growing bilateral cooperation. Wang invited further inquiries about joint initiatives by consulting the Chinese Embassy.

The Foreign Minister also voiced China’s commitment to backing Africa’s security efforts. Both Nigeria and China reject external interference in Africa’s security matters, advocating for African-led solutions to regional challenges. Wang Yi reiterated China’s support for initiatives aimed at strengthening peace and security in Africa, including a CN¥1 billion military assistance package for training 6,000 military personnel and 1,000 law enforcement officers across the continent.

China will continue to support the African Standby Force and contribute to the ongoing peacekeeping operations across Africa. In his remarks, Wang emphasized the importance of multilateralism, the protection of African nations’ rights, and Nigeria’s pivotal role in regional security, particularly in the West African and Sahel regions.

Nigeria’s Foreign Minister, Yusuf Tuggar, echoed the importance of self-reliance in addressing security challenges. He expressed Nigeria’s desire to work with China to develop domestic military production capabilities, rather than relying on private military companies.

Wang’s visit further solidifies the growing strategic partnership between China and Nigeria, with an emphasis on enhancing trade, agriculture, finance, and mutual prosperity.