Chinese Traders Now Accepting Naira as Nigeria Renews $2B Currency Swap to Boost Bilateral Trade

In a significant boost to Nigeria-China economic ties Chinese traders have begun accepting the Nigerian Naira directly in place of the US dollar following the renewal of a $2 billion currency swap agreement between the two countries.

The renewed pact inked in December 2024, aims to reduce reliance on the US dollar in bilateral trade, facilitating smoother and cost-effective transactions.

The currency swap allows Nigerian and Chinese businesses to conduct trade directly in their respective local currencies—Naira and Yuan—bypassing the traditional US dollar as the intermediary currency.

This move is part of broader de-dollarization efforts and is expected to lower transaction costs improve trade efficiency, and enhance liquidity for enterprises involved in cross-border commerce.

According to the Central Bank of Nigeria the agreement strengthens economic cooperation and promotes stability by providing a platform that reduces exchange rate risks and transaction charges.

It also aligns with Nigeria’s economic diversification goals by fostering increased trade, investment and monetary policy flexibility.

China remains Nigeria’s largest trading partner, with bilateral trade valued at over $20 billion annually. This currency swap deal is seen as a milestone in Nigeria’s efforts to deepen South-South cooperation and reduce exposure to Western financial systems.

While the initiative presents opportunities for economic growth, experts caution about Nigeria’s increased exposure to China’s economic policies and urge careful management of the swap framework to sustain long-term benefits.

The acceptance of the Naira by Chinese traders marks a new chapter in the countries’ bilateral relations, enhancing trade volumes and strengthening mutual economic resilience.