Joyce Mmereole Okoli
The Central Bank of Nigeria (CBN) has lauded the Nigeria-China currency swap deal as a landmark policy initiative that could transform Nigeria’s maritime trade sector and ease foreign exchange pressures, even as experts caution that deeper structural reforms are necessary to ensure its long-term sustainability.
Speaking at a stakeholders’ breakfast meeting organized by the Maritime Reporters’ Association of Nigeria (MARAN) in Lagos on Tuesday, CBN Governor Olayemi Cardoso—represented by his Special Adviser on Finance and Strategy, Mr. Anthony Ogufere—highlighted the strategic advantages of the swap agreement.
The deal, first signed in 2018 and renewed in December 2024, allows trade between Nigeria and China to be settled in naira and renminbi, bypassing the U.S. dollar. Cardoso noted that this reduces pressure on Nigeria’s dollar reserves and lowers the cost of doing business.
“The swap agreement simplifies trade settlements in local currencies and enhances competitiveness,” Ogufere said. “It has significant potential to reduce shipping costs and improve efficiency in the maritime industry.”
China emerged as Nigeria’s top trading partner in 2024, accounting for about 35% of imports and a trade volume of $11.58 billion. Ogufere noted that the maritime sector, which manages the bulk of Nigeria’s imports and exports, stands to benefit from improved trade finance, quicker port clearances, and direct shipping links through Chinese-backed infrastructure like the Lekki Deep Sea Port.
Despite these gains, the CBN acknowledged persistent challenges, including Nigeria’s trade imbalance with China and the limited adoption of the yuan by local businesses. Cardoso called for greater sensitization, improved policy coordination, and an aggressive push to boost Nigeria’s non-oil exports to China.
Presenting a more cautious view, Mr. Martins Olajide of the Nigeria-China Strategic Partnership described the swap deal as a double-edged sword. While it offers short-term relief, he warned that the arrangement, if not backed by structural reforms, could entrench Nigeria’s economic dependence on China.
“The swapization of our economy might stabilize transactions today, but without industrialization, value addition, and domestic production, we risk deepening our vulnerability,” Olajide said.
Chairman of the event and head of the Customs Consultative Council, Aare Akeem Olarenwaju, echoed concerns over the volatility of the naira-dollar exchange rate. He emphasized the need for broader public education on alternative currencies like the Chinese yuan.
“You can’t plan with this level of instability. Exchange rate swings are pricing essential goods out of reach for everyday Nigerians,” he said, advocating for more accessible conversations around currency diversification.
In his welcome address, MARAN President Mr. Godfrey Bivbere urged stakeholders to assess the currency swap critically. While recognizing its benefits, he stressed the need to balance optimism with scrutiny.
“We must interrogate both the opportunities and the risks of deeper economic ties with China,” Bivbere said. “Only policies that serve Nigeria’s long-term interests can deliver real, sustainable progress,” he said.