LAGOS, Nigeria (Chatnewstv.com) — Some foreign exchange traders say Nigeria’s currency swap agreement with China is reducing pressure on the naira, as more Chinese businesses now accept naira directly in exchange for yuan instead of insisting on dollars.
They also cited the growth of peer-to-peer (P2P) forex trading as another factor stabilizing the exchange rate. P2P platforms allow individuals to exchange currencies directly without banks or intermediaries.
Nigeria and China first signed a $2.5 billion currency swap deal in April 2018 to lessen reliance on the dollar and facilitate trade. In December 2024, the Federal Government renewed a $2 billion version of the agreement to deepen bilateral commerce.
China remains Nigeria’s largest trading partner, with imports from China valued at ₦14.14 trillion and exports exceeding ₦3 trillion in 2024.
Aminu Gwadebe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), said the willingness of Chinese traders to accept naira has been key to recent market stability.
“The Chinese are now collecting naira for yuan, doing P2P. Go to any mining factory and you will see a Chinese man in Nigeria. The two things are working — Chinese swap and P2P — which the CBN is not doing,” Gwadebe said.
He noted that importers now face less need for dollars.
“If a Nigerian is importing from China, all he needs is yuan to settle his affairs. You don’t even need dollars. Why convert from naira to dollar, then dollar to yuan? It doesn’t make sense as a businessman,” he said.
Still, Gwadebe described the official swap program as “already a failure,” arguing that while the formal deal has expired, many transactions continue informally.
Another forex trader, Yusuf, said the swap’s effect on daily market activity remains limited because the dollar still dominates.
“Yes, the swap agreement between Nigeria and China has some influence, but the effect is not that strong in day-to-day market operations. The main idea was to reduce dependence on the U.S. dollar. But in reality, many Nigerian traders still prefer USD because it is more widely accepted globally. Even Chinese suppliers often ask for dollars,” Yusuf said.
He added that yuan is not widely accessible in street markets, limiting its use for remittances, school fees and medical payments abroad.
