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Two years after talks, Nigeria’s currency deal with China stalls



Two years after talks, Nigeria’s currency deal with China stalls

Two years after talks, Nigeria’s currency deal with China stalls


Two years after the administration of President Muhammadu Buhari announced that the country was in advanced talks with China for a currency swap deal, the scheme has failed to take off.
The development now appears like a similar move made earlier under the administration of Goodluck Jonathan in 2013, in which several infrastructure deals were signed, but later reduced to bilateral trade rather than finance and capital flows.

According to reports, after a meeting with Chinese President Xi Jinping in Beijing two years ago, the Industrial and Commercial Bank of China Ltd (ICBC), the world’s biggest lender, and Nigeria’s Central Bank signed a deal on yuan transactions.

“It means that the renminbi (yuan) is free to flow among different banks in Nigeria, and the renminbi has been included in the foreign exchange reserves of Nigeria,” the Director-General of the African Affairs Department of China’s foreign ministry, Lin Songtian, said.

But the planned engagement was trailed by a mix of optimism, pessimism and caution from stakeholders and experts, citing previous experiences of similar efforts.

Foremost industrialist, Mazi Sam Ohuabunwa, in a monitored television programme, had said that the optimism greeting the Nigeria-China deals might pale into insignificance, if the negotiators failed on the contents and terms of the agreement, especially with an antecedent of similar deals in other African countries that have not been totally progressive.

For analysts at Afrinvest, the strong participation of private investors in the FDI and loan agreements sealed, sequel to the move, would improve the implementation rate relative to past bi-lateral investment engagements and could potentially boost capital importation from China and domestic infrastructure investment.

“We are currently caught in-between the two positions taken by the CBN Governor and Minster of Foreign Affairs.

While awaiting official clarifications, we think the ‘currency deal’ could either be a conventional swap, in which the CBN and China would exchange a stock of their currencies at a predetermined exchange rate to be reversed at maturity of the swap line or a move by China to boost yuan-liquidity in Nigerian banks as a trade and investment currency in exchange for future assets transfer (probably oil) to China to liquidate the swap line,” the analysts said.

Statistics showed that between 2013 and February 2016, Nigeria received $213.4 million worth of capital inflows from Mainland China, which are about 0.4 per cent of the $52.4 billion total capital importation into Nigeria within the period, ranking as the 18th largest source of foreign capital inflows into Nigeria.

But including the autonomous region of Hong Kong, total capital flows from People’s Republic of China amounted to $484.2 million within the period, still less than one per cent of total capital importation into Nigeria.

As at the end of 2017, the value of merchandise trade between Nigeria and China was put at $2.7 billion, making Nigeria the third largest African partner with China. But the figure was lopsided in favour of China.

Renowned economist and Chief Executive Officer of Financial Derivatives Limited, Bismarck Rewane, described the initial efforts as a waste of time and an aspiration that was never going to materialise.

He said there were too many unknown swap deals, with several of such deals in other countries not being progressive and models to follow.

“Nigeria wouldn’t have been better for it. If you want bilateral or trade relations, it is better to do it with your money not swap. Naira is not a convertible currency in the international market, but our oil earnings are in dollars.

So, we are still in the same place, that is, sell your crude oil in dollars and buy from China in dollars. Unless we sell crude oil to them and collect their yuan, swap is not ideal,” he said.

A top bank chief, who would not want his name in print said the mention of “swap” in the discussion was the biggest diversion that would have made any deal cumbersome and a rip-off on the country, because China knows how to get a better bargain.

“But I thought there would have been also talks about reducing the naira-dollar-yuan intricacies in trade between the country and Nigeria. In fact, what the United Kingdom just offered Nigeria recently is what I thought the leadership would have pressed for.

“In all, the trip and the proposal were more like showing that we said something instead of not saying anything because I can’t see any positive since then except borrowing from them. The worst was the un-clarity, secrecy and withholding of information that dogged the plan until its failure,” the source said.

A fiscal governance campaigner, Eze Onyekpere, said such heightened expectations by government through media was a clear case of “governance by propaganda”.

According to him, the way it was presented at the beginning was more of a done or near deal, with promises of improved returns for the economy.

“The two scenarios, which are tantamount to failure is either they lied to us, when there was no agreement or they failed to follow through the deal. But they were faster in rushing to the media and now they have failed. It’s such a disappointment,” he said.

The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, said he was doubtful from the beginning of the possibility of such a deal that its terms were not defined- particularly the exchange rate and timeline.

According to him, it is one of the failed projects because there is no sign now that government has it on its agenda, as everything has remained under uncertainty and secrecy.

“It is like government took its eyes off it. Even the expectations that some of the Chinese counterparts will establish some of their plants here did not really work. But as usual, the Chinese are taking advantage of Nigeria as you can see them almost everywhere,” he said.


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Labour Force

Kogi Governor Approves Implementation of N30,000 Minimum Wage for workers



Kogi Governor Approves Implementation of N30,000 Minimum Wage for workers

Kogi state governor, Yahaya Bello, has approved the implementation of N30,000 as minimum wage for the workers in the state.


The secretary to the state government, Folashade Ayoade disclosed this on Tuesday after an extensive meeting with the organized labour in Lokoja


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She blamed the delay in the implementation on the inability for the committee to meet regularly due to the covid-19 pandemic which has been overcome.


The SSG equally commended the organised labour for their understanding and patience, which she said has resulted into the signing of the implementation of the new minimum wage.

Read Also: FCTA Set to Implement Minimum Wage for FCT Workers

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CBN to End Forex Sales to Commercial Banks in 2022



Author: Eunice Johnson, Abuja 

The Central Bank of Nigeria (CBN) has put Deposit Money Banks (DMBs) on notice that it will stop selling forex to them by the end of 2022. CBN Governor Godwin Emefiele made this known in Abuja on Thursday at the end of the Bankers’ Committee Meeting where he also introduced the RT200 Programme.




Emefiele said the time had come for the banks to go out there and source for forex by funding entrepreneurs with ideas. The CBN, Emefiele said, will support the banks by granting rebates and other support until the banks find their feet in sourcing their forex by themselves.

He also disclosed that the apex bank’s policies and measures have led to a significant improvement in diaspora inflow from an average of US$6 million per week in December 2020 to an average of over US$100 million per week by January 2022. He added that the CBN would be reviewing these intervention programmes going forward to ensure that they continue to achieve the desired results.

He said international bodies, including some embassies and donor agencies, have been complicit in illegal forex transactions that have hindered the flow of foreign exchange into the country.


Read Also: CBN Encourages Nigerians to Accept E-Naira

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Customs Corner

Customs CG Deploys 37 Comptrollers as Comptroller Attah Heads Kebbi Command



Customs CG Deploys 37 Comptrollers as Comptroller Attah Heads Kebbi Command

Author: Gift Wada, Abuja

The Comptroller General of Customs Col. Hameed Ibrahim Ali (Rtd.) has approved the deployment of 37 Comptrollers to various Units, Departments and Commands across the country.

This was disclosed in a release signed on Tuesday by the Customs Deputy National, DC Timi Bomodi for the Comptroller General of Customs.

Among those deployed are the present National PRO of Customs Comptroller Joseph Attah who will assume the office of Area Controller of Kebbi Command, Comptroller AAS Oloyede who shall be moving from ICT/MOD to Tin Can Island Port Command, while Comptroller SI Bomoi to FCT Command. Other postings are Comptroller BA Jaiyeoba to Oyo/Osun Command, Comptroller A Dappa-Williams to Eastern Marine Command, Compt. MA Umar Kano/Jigawa, Compt. KC Egwuh ICT/MOD, Compt. LM Mark Enugu/Anambra/Ebonyi, Compt. T Tachio CTC Kano, Compt. AA Umar Western Marine, Compt. M Dansakwa North Eastern Marine, Compt. AC Ayalogu T & T and Compt. KD Ilesanmi will assume duty as Comptroller Board among others.


Ali in postings released on 7th of February, charged the newly posted Comptrollers to justify the confidence reposed in them by NCS Management by bringing to bear their years of experience and training in trade facilitation and anti-smuggling activities on their new assignment.


Given the enormous expectations of government regarding revenue generation in the current year, the Comptroller General reiterated the need for all Area Controllers and Unit heads to take full charge of the affairs of their Commands by ensuring absolute compliance with extant fiscal policies while leveraging on the efficient management of data to optimize trade facilitation and revenue collection.

Furthermore, the CGC directed all officers to be extremely vigilant in protecting the lives and wellbeing of Nigerians by ensuring the full fortification of our borders against the incursion of smugglers and other cross border criminals.

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Customs Raises Concerns over Finance Act as Senate Sets N3trn Target for Revenue Agencies

Comptroller Ali Ibrahim Assumes Duty as New Customs FOU Zone ‘C’ Boss

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