In a strategic move aimed at reinforcing economic ties, President Bola Tinubu of Nigeria has urged the Chinese government to increase the existing $2 billion currency swap agreement between the two nations. This call was made during a high-profile meeting with Wang Yi, China’s Foreign Minister, at the State House in Abuja on January 9, 2025.
President Tinubu, emphasizing the need for enhanced trade and infrastructural development, stated that the current level of currency swaps is inadequate for the ambitious programs and projects Nigeria has lined up. “We still demand more in the area of currency swap. The level you have approved as a government for Nigeria is inadequate considering our programme,” Tinubu remarked, according to multiple sources, including a press release from the Nigerian Presidency and posts on X (formerly Twitter) by official government accounts.
The currency swap agreement, initially valued at 15 billion yuan (approximately $2 billion), was renewed in December 2024, signaling a commitment from both countries to deepen financial cooperation and to facilitate smoother transactions without the intermediary of a third currency, primarily the US dollar. This agreement allows Nigerian businesses to pay for Chinese imports in Yuan and vice versa, reducing the pressure on Nigeria’s foreign exchange reserves.
Tinubu’s call for an increase in the swap amount is part of a broader initiative to strengthen the economic partnership between Nigeria and China. He also advocated for an upward review of the $50 billion aid package for Africa announced by Chinese President Xi Jinping last year, highlighting Africa’s vast infrastructural needs, which exceed current commitments.
During the discussions, President Tinubu did not only focus on economic aspects but also sought China’s support for Nigeria’s bid for a permanent seat on the United Nations Security Council. “You are a member of the UN Security Council. We want you to use your influence to ensure Nigeria secures the seat,” he stated, showcasing Nigeria’s aspirations for greater global representation.
The meeting with Foreign Minister Wang Yi was fruitful, with both parties expressing satisfaction over the deepening of bilateral relations. Wang Yi appreciated Nigeria’s approach to governance and its adherence to the one-China principle, promising continued support for Nigeria’s developmental agenda, including the “Renewed Hope Agenda,” counter-terrorism efforts, and regional security.
This push for an increased currency swap comes at a time when Nigeria is seeking innovative ways to manage its economy, particularly in the face of foreign exchange volatility. By enhancing this financial mechanism, Nigeria aims to not only boost trade with China but also to stabilize its currency and promote economic growth through direct Yuan-Naira transactions.
The call for an expanded currency swap has been met with optimism from economic analysts who see this as a step towards reducing Nigeria’s reliance on the dollar and fostering a more balanced trade relationship with China. However, there are also concerns about the implications for Nigeria’s trade balance, given the country’s history of trade deficits with China.
President Tinubu’s initiative reflects a strategic approach to international relations, focusing on economic diplomacy to drive Nigeria’s development agenda. With both countries pledging to work closely on this and other cooperative ventures, the world watches how this enhanced relationship might reshape economic landscapes in Africa and beyond.
