The National Association of Nigerian Traders (NANTS) has examined the recent Nigeria-China currency swap deal which has been in the pipeline since 2016 and was finally consummated on April 27, 2018. WE recall specifically that that on April 13, 2016, the Central Bank of Nigeria (CBN) and the Industrial and Commercial Bank of China Ltd (ICBC) signed a currency swap deal on behalf of both Countries. NANTS believes that the final signing the deal worth $2.5billion by the Federal Government of Nigeria, is a significant exhibition of wisdom, high political will and courage on the part of the current administration to advance trade as a vehicle for economic growth and development in Nigeria, and must therefore be commended.
NANTS further believes that the secured agreement would help in providing adequate local currency liquidity to Nigerian and Chinese Industrialists and other businesses, thereby reducing the demand for dollar and the attendant difficulties encountered in the search for third currencies. This smart move which is long overdue, in NANTS estimation, would ease the lingering exchange rate crisis which has been heightened by the country’s high volume of imports. WE therefore see the deal as a strategic move that would gradually strengthen the Naira against the US dollar and certainly reduce attention to and/or the unwitting ‘dollarization’ of the nation’s economy. While we do not have anything against the US dollar, we however note that its scarcity has remained a nightmare and punishment to the average Nigerian trader.
Statistically, we note that in 2015, Nigeria’s trade volume with China rose to $14.94 billion, representing 22.2% of the $78.56 billion it traded with her eight biggest partners. At present, about 78.1% of the nation’s import of consumables come from the Asian Tiger, and these are items that flow into the market space in large volumes and turnover.