One of the core pillars of President Bola Tinubu Renewed Hope Agenda is Driving Economic Growth and Development through Strategic Partnerships and Reforms.
In line with this, stakeholders at the Maritime Reporters Association of Nigeria (MARAN) Breakfast Meeting held on Tuesday April 15, 2025 in Lagos, have described the ‘Nigeria-China Currency Swap’ as a welcome development that would ease trade between the two nations.
The ‘Nigeria-China Currency SWAP Deal’ pursues the use of the currency of both countries, Naira and Renminbi for trade transactions, against the United States of America (USA) dollar. This, stakeholders at the meeting unanimously agreed will reduce transaction cost and time.
The SWAP backed by the Central Banks of both countries; the Central Bank of Nigeria (CBN) and the People’s Bank of China was signed in 2018 and renewed in December 2024.
Setting the tone for the discourse, the CBN Governor, Mr. Olayemi Cardoso, represented by his Special Adviser on Finance and Strategy Mr. Anthony Ogufere, spoke on the theme of the day ‘Navigating the Nigeria-China Currency Swap: Opportunities and Challenges for Import, Export, and Maritime Business’, noting that major imports into Nigeria come from China, hence, the need for a currency swap that will aid trade efficiency.
China, according to him accounts for 35 per cent of imports into the country, therefore a Nigeria-China Currency Swap’ Deal, an initiative of the CBN will reduce transaction cost by ensuring businesses between the two countries are carried out using their local currencies.
In his welcome address at the meeting the President of MARAN, Mr. Godfrey Bivbere, noted that the dialogue is coming at a pivotal moment in Nigeria’s economic landscape.
He further noted that the SWAP has the potential for reduced transaction costs, increased trade volumes, and would create pathways to enhanced economic cooperation with a major global partner.
Representative of the Managing Director of the Nigeria Ports Authority (NPA), Port Manager, Lagos Port Complex, Mr. Lawal Ibrahim, in a goodwill message appreciated MARAN for coming with such a timely topic that would boost trade facilitation.
He however, queried why the dollar exchange rate remains the benchmark for transactions within the SWAP Deal.
Ogufere in response said the dollar exchange rate is being used in the interim as a notional anchor to help, with a view of adjustments when there is a lot of trade and settlements, just as Nigeria gradually adjusted from pound sterling to dollar.
On his part, the Executive Secretary of the Nigeria Shippers Council (NSC), Dr. Pius Akutah, described the the SWAP as a welcome initiative because its benefits outweigh the demerits.
He called for an extended forum on the topic involving the Manufacturers Association of Nigeria (MAN) and Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) “because we’re considering using this initiative for capital projects such as infrastructure development, vessel acquisition whether in agriculture or maritime sectors”.
He pointed out that China has taken over from South Korea as the largest manufacturer of vessels (ships) to the extent that even South Korea goes to China for purchase of small vessels as well as ship repairs.
Akujobi, therefore lauded this CBN initiative and implored all and sundry to spread the message, as he harped on increased awareness and sensitisation through the media.
Also speaking, the Secretary General of the National Association of Government Approved Freight Forwarders (NAGAFF), Fwdr. Godfrey Nwosu, representing the President of the Association, High Chief Tochukwu Ezisi, emphasised that a currency swap between Nigeria and China has far-reaching implications for transaction costs, trade volume, and the operational dynamics of various business sectors, including importers, exporters, and maritime businesses.
In a decisive breakdown of these potential effects, he said there will be a significant reduction in Foreign Exchange (FX) Conversion Costs as Nigeria and China will directly exchange goods and services using their local currencies (Naira and Renminbi) which invariably will end in decreased costs associated with currency conversions.
He added that it will boost Trade Efficiency and Growth, hence, a resultant increase in trade volume as businesses can engage in cross-border trade with remarkable efficiency.
Nwosu also noted that the initiative will generally impact on Maritime Business through reduced shipping costs, among other benefits.