Chinese traders in Nigeria have begun accepting the naira directly in exchange for the yuan, a shift that analysts say signals growing confidence in Nigeria’s local currency.
According to Nairametrics, the development is linked to the Nigeria–China currency swap agreement and the rise of peer-to-peer (P2P) forex trading, both of which have helped ease pressure on the naira and stabilise exchange rates.
Currency Swap and Trade Flows
Nigeria and China first signed a $2.5 billion currency swap deal in April 2018 to facilitate trade without heavy reliance on the U.S. dollar. The agreement was renewed in December 2024 with a $2 billion package, aimed at boosting liquidity for businesses in both countries.
With China being Nigeria’s largest trading partner — supplying goods worth N14.14 trillion in 2024 alone — the swap deal allows businesses to settle transactions in yuan and naira instead of converting to dollars.
Mixed Reactions from Forex Market Players
Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), said the direct acceptance of naira by Chinese traders was injecting liquidity into the market.
“The Chinese are now collecting naira for yuan, doing P2P. Go to any mining factory and you will see a Chinese man in Nigeria… there is a lot of liquidity in the market,” he said.
However, he admitted the swap deal itself has had limited impact, calling it “a failure” in its current form.
Another trader, Yusuf, noted that while the deal reduces reliance on the U.S. dollar in theory, most traders still prefer dollars for international transactions. “You can’t easily walk into a BDC and buy yuan like you do with dollars, pounds, or euros,” he explained.
Presidency: ‘Tinubu’s Reforms Are Working’
Reacting to the development, President Bola Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, described it as proof that reforms under the current administration are restoring trust in the naira.
“This is a salutary development for the Nigerian economy. The Tinubu reforms are making foreigners have faith in the naira,” Onanuga wrote on X (formerly Twitter).
“The Almighty US dollar is not the ultimate king here. The naira is waxing stronger as an international means of exchange.”
Onanuga also noted that Chinese e-commerce platforms now accept Nigerian naira cards, underscoring the growing role of the local currency in global trade.
