Contrary to previous reports indicating that the currency swap agreement between Nigeria and China had expired, the Central Bank of Nigeria (CBN) has disclosed that the bilateral currency agreement was indeed renewed after its expiration in 2021.
The details of the 2018 currency swap agreement between CBN and the People’s Bank of China (PBoC) were released in response to a Freedom of Information (FOI) request from human rights lawyer Femi Falana. The original deal, signed in May 2018, was valued at RMB 16 billion (approximately $2.5 billion) and aimed to provide direct access to Chinese and Nigerian currencies for businesses in both countries.
The CBN clarified that the swap deal, initially expired in April 2021, is renewable every three years and has been renewed. The CBN also provided information on the utilization and repayment of the swapped funds, with the next renewal expected in 2024.
Opinion:
The renewal of the currency swap agreement between Nigeria and China highlights the importance of maintaining economic partnerships and avenues for international trade. Currency swap agreements can facilitate smoother cross-border transactions and trade, contributing to economic growth and stability. The transparency exhibited by the Central Bank of Nigeria in responding to the FOI request helps clarify the status of the agreement and provides insights into its utilization. The agreement’s renewal and the mutual cooperation between the two countries can support trade activities and strengthen economic ties.