China to Consider Expanding Currency Swap Agreement with Nigeria

The People’s Republic of China has announced its willingness to consider Nigeria’s request to expand the bilateral currency swap agreement, a move aimed at strengthening financial cooperation between the two nations.

China’s Foreign Minister, Wang Yi, disclosed this on Thursday while briefing State House Correspondents after a meeting with President Bola Tinubu at the Aso Rock Villa, Abuja.

The currency swap agreement, initially signed in 2018 between the People’s Bank of China and the Central Bank of Nigeria, was valued at CN¥15 billion, equivalent to approximately N720 billion or US$2.5 billion at the time. It was designed to reduce reliance on the US dollar, stabilize Nigeria’s foreign reserves, and promote trade and investment between the two countries.

Wang Yi emphasized the ongoing momentum in bilateral financial relations, encouraging Nigeria to explore issuing Panda bonds in China’s domestic markets. Panda bonds are renminbi-denominated bonds issued by foreign entities in China, allowing countries and corporations to raise capital directly within China while diversifying funding sources.

“The currency swap agreement shows the depth of our financial cooperation,” Wang stated. “We will favorably consider Nigeria’s request to increase the currency swap line. Additionally, we welcome Nigeria to issue Panda bonds in China’s markets, as we have confidence in Nigeria’s economic credibility.”

Wang highlighted that such initiatives could generate significant revenue for Nigeria and support key infrastructure projects, such as railway modernization. He also pointed to the recent financial backing from Chinese banks for Phase III of Nigeria’s railway project as evidence of the strong economic collaboration between the two nations.

Strengthening African Security and Development

Beyond financial cooperation, China and Nigeria reaffirmed their commitment to African-led solutions for security challenges on the continent. Both nations rejected external interference in Africa’s internal affairs, advocating for local and regional approaches to peacekeeping and counterterrorism.

Wang Yi pledged Beijing’s full support for Africa’s security initiatives, including a CN¥1 billion military assistance package. This package involves training 6,000 military personnel and 1,000 police officers across various African countries and bolstering the African Standby Force and rapid response units.

“China firmly supports Africa in building its peace and security capacity,” Wang said. “We will work with Africa to implement the Global Security Initiative and provide military assistance to enhance regional stability.”

He added that China would continue to advocate for Africa’s interests at the United Nations Security Council and remain a key contributor to peacekeeping efforts on the continent.

Nigeria’s Push for Local Military Production

Nigeria’s Foreign Minister, Yusuf Tuggar, echoed the need for self-reliance in addressing the nation’s security challenges. Tuggar emphasized Nigeria’s focus on domestic production of military equipment with China’s collaboration to reduce dependency on foreign procurement.

“We want to work with China to domesticate the production of military equipment, both kinetic and non-kinetic,” Tuggar said. “This will ensure we address our security challenges swiftly and efficiently without the delays associated with external procurement.”

He reiterated Nigeria’s leadership role in promoting peace and stability in West Africa and the Sahel region, stressing the need for collaborative efforts among neighboring countries.

A Growing Partnership

The discussions between Nigeria and China underscore the deepening economic and security ties between the two nations. From expanding the currency swap agreement to exploring new financial instruments like Panda bonds and advancing regional security initiatives, both countries are positioning their partnership as a cornerstone for mutual growth and development.

Wang Yi expressed optimism about the future of the relationship, stating, “China is committed to supporting Nigeria in its journey toward economic stability, infrastructure development, and regional leadership. Together, we can achieve strength through unity and cooperation.”