China to Consider Expanding Currency Swap Agreement With Nigeria
China has expressed its willingness to consider Nigeria’s request to expand its currency swap agreement and plans to issue panda bonds.
Chinese Foreign Minister Wang Yi highlighted the currency swap agreement as evidence of strong financial cooperation between the two nations.
Wang Yi made the announcement on Thursday in Abuja during his visit to Nigeria as part of a broader four-nation tour of Africa aimed at strengthening Beijing’s influence on the continent.
He stated, “As with regard to Nigeria’s wish to increase the line of the currency swap, we will favourably study and consider the issue. Our cooperation is going well in many ways, in terms of finance.”
Wang Yi further expressed China’s confidence in Nigeria’s credibility and welcomed Nigeria’s intention to issue panda bonds in China.
He said, “For instance, we welcome the panda bonds to be issued. We welcome Nigeria to issue panda bonds in China because we have full confidence in Nigeria’s credibility. By issuing panda bonds, Nigeria will gain good revenue and the safety is guaranteed through financial support. We are working to contribute to Nigeria’s infrastructure development, in particular, the railway.”
High-level bilateral exchanges
Wang’s visit to Nigeria follows recent high-level exchanges, including intergovernmental committee talks in Beijing last June and Nigerian President Bola Tinubu’s state visit to China in September.
These meetings have elevated bilateral relations to a “comprehensive strategic partnership,” Wang Yi announced during a press conference.
In a notable development, the China Development Bank (CDB) granted a loan of $254.76 million on January 8 for the construction of the Kano-Kaduna railway project in Nigeria. The construction is being undertaken by China Civil Engineering Construction Corporation (CCECC), with financial backing from the CDB.
What you should know
- A currency swap line is an agreement between two central banks to exchange currencies, while panda bonds are securities denominated in the Chinese Yuan (Renminbi) and issued by a foreign company in China.
- China and Nigeria recently renewed their currency swap agreement, valued at 15 billion yuan (approximately $2 billion), to enhance trade and investment between the two nations.
- The agreement, valid for three years, aims to strengthen financial cooperation and promote the use of both currencies in bilateral transactions.
On regional peace and security, Wang Yi stated that at the United Nations Security Council, China would always vote in favor of Africa and continue to support Nigeria in rallying countries in the region.
Before arriving in Nigeria, Wang Yi visited neighboring Chad on Wednesday, where he held bilateral meetings with Prime Minister Allamaye Halina, anticipating continued mutually beneficial cooperation between the two countries.
In September 2024, Chadian President Mahamat Idriss Deby attended the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, where the two heads of state elevated bilateral relations to a strategic partnership, advancing their relations to a new level.
