FG Says “Currency Swap Deal” Is A Misconception


As opposed to the information in circulation, the Federal Government yesterday explained that China’s agreement with the Central Bank of Nigeria during the recent seven days official visit of President Muhammadu Buhari to the country could not be described as a currency swap deal.

The Minister of Foreign Affairs, Geoffrey Onyeama, made this disclosure at the Presidential Villa while briefing the State House correspondents at the end of the Federal Executive Council, FEC, meeting chaired by President Muhammadu Buhari.

The Minister, accompanied by the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, had spoken to newsmen on the gains of President Buhari’s visit when he was asked to throw more light on the widely-reported currency swap deal. He explained thus:

“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 currency swap deal or any such thing.

Currency Swap Deal

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“It’s not really a currency swap deal. What it takes is that as the Chinese economy goes strong, there is some pressure on them from the 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 wanted to segment it.

“For Southern Africa, South Africa is going to be the sort of a hub for the currency. So, they are going to be the focal point for the Chinese to make that available for trade in that area.

“In West Africa, they are looking for a hub. Ghana is interested in being the hub for the currency to circulate it 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 a kind of attracted to Nigeria to be the hub”.

The minister who went ahead to explain that it would be in the best interest of the country for Nigeria to be the hub and that it would also benefit the nation to use Yuan when buying goods from China, also added that it will not in any way rule out the use of dollars.

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