As part of efforts to strengthen trade ties with foreign investors, the Governor of the Central Bank of Nigeria (CBN), has recently announced that China will soon start importing goods from Nigeria following an agreement signed between the two countries.Speaking at a press conference at the World Bank headquarters in Washington on the last day of the 2016 World Bank/IMF spring meetings, CBN governor, Godwin Emefiele, said Nigeria will become China’s principal trading hub in West Africa. The announcement comes shortly after President Muhammadu Buhari’s visit to the Asian economic giant in early April.
The new agreement, which would see trade and business between China and Nigeria done in the Chinese currency, also expects the CBN to diversify a huge chunk of Nigeria’s foreign reserves from the dollar to the renminbi. It also includes Nigeria becoming a clearing house for yuan denominated transactions for the whole of Africa, with Nigeria also considering issuing Panda bonds – mainly yuan denominated – against euro bonds, as they are cheaper.
Meanwhile, Chinese President Xi Jing Ping told Buhari that there is huge potential for more economic cooperation, in oil refining, mining and agriculture with China offering Nigeria $15million for agricultural exploration.
China also signed agreements to develop infrastructure in Nigeria and offered a loan worth $6 billion to fund these projects.
The loan, according to sources, will be issued in yuan through a service exchange arrangement and not direct cash.