FG: No Currency Swap Agreement With China

Muhammadu Buhari-Xi JinpingThe Federal Government yesterday denied that Nigeria signed a currency swap deal with China during President Muhammadu Buhari’s visit to that country last week.
The Minister of Foreign Affairs, Geoffrey Onyeama, made the clarification yesterday while speaking with State House correspondents after yesterday’s Federal Executive Council (FEC).
According to Onyeama, there was no such deal with China during Buhari’s recent visit.
He said: “As you know, a lot of importers now are complaining that they are not able to access dollars to buy goods and things like that. So, if in addition to dollars, we have the Yuan, then they can also have it available. So, it has given us a greater opportunity for our economy so that those people can also now import notwithstanding the shortage of dollars. So, that is really what it is more about, rather than a swap deal or any such thing.
“It’s not really a swap. What it is, is that as the Chinese economy goes strong, there is some pressure on them from trading partners, international financial institutions. They agreed that the money should be internationalised. So, they started that for a while. They were protecting it also. They did not allow it to be fully exchangeable. But now, their economy is fully strong, they are looking for a way to internationalise the currency. Now, they are saying essentially that they want to segment it.
“For Southern Africa, South Africa is going to be the sort of a hub for the currency. In West Africa, they’re looking for a hub. Ghana is interested in being the hub for the currency to circulate for those who want to use it. It is not compulsory. But Nigeria is a bigger country with bigger economy. So, that does make sense. And they became kind of attracted to Nigeria to be the hub”.