The Nigerian naira has continued to appreciate against the US dollar, with the National President of the Association of Bureau De Change Operators, Aminu Gwadabe, attributing this trend in part to renewed confidence in the Nigeria-China currency swap deal. According to Gwadabe, the naira’s stability can be linked to the growing acceptance of the Nigerian currency by Chinese investors and businesses operating in the country.
In recent times, Chinese nationals have been conducting their day-to-day business in naira, particularly in the mining sector, where they are increasingly using the local currency for transactions instead of the US dollar. This shift is significant, as it suggests that the Nigeria-China currency swap agreement is gaining traction. The agreement, which was sealed in December 2024, allows for the exchange of N3.28 trillion or 15 billion yuan between the two countries.
The development has made it easier for Nigerian importers to conduct business with Chinese counterparts, as they can now use yuan for transactions instead of relying on the US dollar. As Gwadabe noted, “If a Nigerian is importing from China, all he needs now is yuan to complete the transaction. There’s no need for dollars.” This change is expected to reduce Nigeria’s reliance on the US dollar and promote the use of local currencies in international trade.
As of Tuesday, the naira was trading at N1,526.06 per dollar, continuing its appreciation against the US currency. The trend has been welcomed by Nigerian authorities, with presidential spokesperson Bayo Onanuga recently stating that the US dollar is no longer the dominant currency in Nigeria. The Nigeria-China currency swap deal is seen as a key factor in this development, and its impact is expected to be closely watched by economists and traders in the coming months.
The growing use of the naira in international transactions is a significant development for Nigeria’s economy, as it could help to reduce the country’s exposure to currency fluctuations and promote economic growth. As the country continues to explore new ways to promote trade and investment, the Nigeria-China currency swap deal is likely to play an increasingly important role in shaping Nigeria’s economic relationships with other countries.
