The Central Bank of Nigeria (CBN) says its bilateral
currency swap agreement with China was renewed after the expiration of the deal
in 2021.
The apex bank released the details of the 2018 currency swap
agreement with Peoples Bank of China (PBoC) in a freedom of information (FOI)
request sent by Femi Falana, a human rights lawyer.
BACKGROUND
In May 2018, CBN and PBoC signed a currency swap deal valued at renminbi (RMB) 16 billion (about $2.5 billion).
The swap deal was signed by Godwin Emefiele, the suspended
CBN governor, and Yi Gang, the former PBoC governor.
The deal was designed to provide the Chinese and Nigerian
currencies directly to industrialists and other businesses from both countries.
“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,” CBN had said after the signing of the deal.
In June 2023, Falana sent an FOI request to the CBN to
disclose the details of the currency swap agreement.
CBN’S RESPONSE
In a response to Falana’s request, the apex bank said the
swap deal, which commenced in July 2018, is renewable every three years, adding
that the agreement was renewed after it expired in April 2021.
The CBN disclosed that the sum of 15 billion Chinese yuan
renminbi (CNY) was the “amount usable within the year”.
The financial regulator said since the renewal of the deal,
nine billion yuan have been “drawn”, six billion yuan utilised, while the sum
of three billion yuan is outstanding.
According to the bank, out of the six billion yuan utilised,
the sum of 5.10 billion yuan had been repaid, while 2.10 billion yuan had not
been utilised.
“The swap commenced in July 2018, expired in April 2021, and
was subsequently renewed. The sum of CNY 15.00 billion was the overdraft amount
usable within the year,” the apex bank disclosed this in a response dated
August 8, 2023.
“Since its renewal, CNY9.00 billion had been drawn, CNY6.00
billion utilized and CNY3.00 billion outstanding, and out of the CNY6.00
billion utilized, the sum of CNY5.10 billion had been repaid, while the sum of
CNY2.10 billion had not been utilized, leaving the sum of CNY900.00 million yet
to be repaid. Furthermore, the next renewal is expected to take place in 2024.”
FALANA ASKS NIGERIANS TO TRANSACT BUSINESS WITH CHINESE PEOPLE IN NAIRA
Commenting on the development, Falana claimed that despite
the currency swap agreement, the federal and state governments, and business
community have been “prevented from transacting business in naira and yuan”.
“The swap was also
designed to improve the speed, convenience, and volume of transactions between
the two countries. But the International Monetary Fund and the World Bank,
which superintend the Central Bank of Nigeria, have colluded with the Central
Bank of Nigeria to frustrate the currency swap.
“The purpose of the economic sabotage is to promote the
dominance of the United States Dollar in Nigeria. Hence, the federal
government, state governments, and the business community have been prevented
from transacting business in Naira and Yuan. Thus, by compelling Nigerians to
pay dollars for goods imported from China, the Central Bank has continued to
promote the unwarranted dollarisation of the Nigerian economy.
The human rights lawyer asked Nigerians to use naira as
payment for goods imported from China.
Nigeria is the only most populated nations on earth that have not turned his back on BRICS alliance. This shows that our leaders are not interested in the progress of this country. As Nigerians ,how is it ridiculously possible to buy goods in Cameroun or in Ivory Coast and pay in dollars. How can Africans have a mechanism to pay for these good in African Single Currency or a swap system in local currency and have a financial regulatory body in-between to finalise transactions. It is fraudulent for Africans to transact business in dollars. The U.S. knows that when Nigeria decides to dedollarises his economy, the dollar will collapse and this will be catastrophic for the US economy and will have an impact in all sectors of the country. The U.S. does not want Nigeria to dedollarised whatsoever in his system because of his gain and profits he gets subjecting countries into their atrocious hegemony and dictates. They also know that, Nigeria being a consuming country, it will be preferable for the US to hang onto the Nigeria government not to join the BRICS alliance and persuade him not to continue with his local currency swap in trade with his partners. Naira is Nigeria legal tender and not dollar. Why should our commercial banks be operating dollar account. Nowhere in the world such thing is possible. This means that Nigeria has two legal tenders, because, no nation on earth has two legal tenders. This is unacceptable and economically not viable for the country. To safeguard our citizens, the Nigeria government must dump the use of dollars in payment for imported goods and services. U.S. most reliable partners, Saudi Arabia has dumped the dollar as well as the petrodollars in his oil sector. Who thought this is possible. America has no friends, all he’s after, is his interest. If Nigeria leaders refuses to understand that, I think the country will continue to sink at the expense of the Nigeria citizens but at the US benefit
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