CBN Signs Currency Swap Agreement with the People’s Bank of China

The Central Bank of Nigeria (CBN) wishes to announce the

execution of a bilateral currency swap agreement with the

Peoples Bank of China (PBoC). The Governor of the CBN,

Mr. Godwin Emefiele, led CBN officials while PBoC Governor,

Dr. Yi Gang, led the Chinese team at the official signing

ceremony in Beijing, China, on Friday, April 27 2018, a

culmination of over two years of painstaking negotiations by

both Central Banks.

The transaction, which is valued at Renminbi (RMB) 16 billion,

or the equivalent of about $2.5bn, is aimed at providing

adequate local currency liquidity to Nigerian and Chinese

industrialists and other businesses thereby reducing the

difficulties encountered in the search for third currencies.

Among other benefits, this agreement will provide Naira liquidity

to Chinese businesses and provide RMB liquidity to Nigerian

businesses respectively, thereby improving the speed,

convenience and volume of transactions between the two

countries. It will also assist both countries in their foreign

exchange reserves management, enhance financial stability and

promote broader economic cooperation between the two


With the operationalisation of this agreement, it will be easier

for most Nigerian manufacturers, especially small and medium

enterprises (SMEs) and cottage industries in manufacturing and

export businesses to import raw materials, spare-parts and

simple machinery to undertake their businesses by taking

advantage of available RMB liquidity from Nigerian banks without

being exposed to the difficulties of seeking other scarce foreign


The deal, which is purely an exchange of currencies, will also

make it easier for Chinese manufacturers seeking to buy raw

materials from Nigeria to obtain enough Naira from banks in

China to pay for their imports from Nigeria. Indeed, the deal will

protect Nigerian business people from the harsh effects of third

currency fluctuations.

With this, Nigeria becomes the third African country to have such

an agreement in place with the PBoC.

Both the Nigerian and Chinese officials expressed delight at the

conclusion and signing of the agreement and expressed the hope

that it would boost mutually beneficial business transactions

between Nigeria and the Peoples Republic of China.


Isaac Okorafor


Ag. Director, Corporate Communications