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Abuja Chamber Says Naira-Yuan Swap Will Deepen Nigeria’s Economic Opportunities With China

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Mr Adetokunbo Kayode, President, Abuja Chamber of Commerce and Industry,  says the naira-Yuan swap deal will deepen Nigeria’s economic opportunities with China and ease payment issues  associated with international trade.

Mr Reuben Lubem, Media and Strategy Officer of the chamber, communicated the Chamber president’s view in a statement  in Abuja on Thursday.

Kayode said Nigeria’s trade volume with China trade volume of 5.8 billion dollars by May, which indicated  an increase of 7.3 per cent over the 2017 record, was a reflection of the impact of the deal.

He lauded the Central Bank of Nigeria (CBN) for embarking on policies that had improved and stabilised the economy,  saying the currency deal was one of such efforts.

Kayode said with such positive impact, it meant the deal had  received a boast and wide acceptance by the business communities of both countries.

“I believe that this swap deal will enable Nigeria and China to easily trade in local liquidity without the trouble of having to switch through an intermediary currency.

“This, no doubt, eases the mode of transaction of businesses across the two countries. It is therefore a welcome development.

“For us in the Organised Private Sector (OPS), the essence is not farfetched because it has simply made China a trading hub by Nigeria, the West African sub-region and indeed the whole of Africa.

“This will make the renmimbi a free flow currency in the banks in Nigeria and is consequently included in our external reserve.

“Let me emphasise that this currency swap means that the Chinese Yuan has the capacity and capability to stand shoulder to shoulder with other internationally recognised vibrant currencies, such as dollar, euro and pound.

“It, therefore, behoves on us in the OPS to see this opening as a low hanging fruit that can easily help improve our business concerns.

“Now our banks can open letters of credit in Yuan instead of only the dollar, euro or pound, ’’he stated.

Kayode, however, cautioned that while the deal had enhanced trade between the two countries, from a financial risk perspective, it should be restricted mainly for equipment, machinery and raw materials procurement.

He said that the chamber was partnering CBN to sensitise the OPS, traders and other business persons on the opportunities inherent in the deal.

According to him, the event will take place on Aug,  8 at the Chamber’s secretariat.

Nigeria and China sealed a currency  swap deal worth 2.4 billion dollars on May 4.

The agreement was secured when President Muhammadu Buhari visited China in 2016 as part of efforts to grow the economy.

According to the CBN, the deal will provide local currency liquidity between Nigerian businessmen and their Chinese counterparts.

 
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