Abuja, Nigeria – The federal government is in advanced talks with China to expand its existing Yuan-Naira currency swap to as much as $10 billion, a move aimed at easing pressure on the US dollar, stabilising the naira, and narrowing a $23 billion trade imbalance that heavily favours Beijing.
Okay News reports that Joseph Tegbe, Director-General and Global Liaison for the Nigeria-China Strategic Partnership, said the government is seeking to renew and scale up the current $2.5 billion swap arrangement. He explained that such a mechanism would allow Nigerian businesses to transact directly in yuan, avoiding the current need to convert naira to dollars and then to yuan, which places additional strain on dollar demand.
The Yuan-Naira swap was first introduced in 2018 under former CBN governor Godwin Emefiele and the People’s Bank of China. The three-year agreement allows both countries to exchange principal and interest in local currencies, reducing reliance on the dollar and facilitating bilateral trade. Tegbe noted that for the swap to be effective, Nigeria’s foreign exchange reserves must be at a comfortable level, a goal being addressed by the Central Bank of Nigeria.
Trade between the two countries remains heavily skewed in China’s favour, with Nigeria’s trade volume currently standing at about $23 billion. Of that figure, only about $2 billion represents Nigerian exports to China, while more than $20 billion accounts for imports, largely electronics, machinery, textiles, and industrial equipment critical for Nigeria’s manufacturing and technology sectors.
Nigeria is also fast-tracking export protocols to take full advantage of China’s zero-tariff policy for African countries, set to take effect in May 2026. Products like hides, skins, cashew, and aquatic items such as crabs and shrimps, often exported informally, will now enter China legally under zero duty. This currency swap expansion represents a strategic effort to rebalance trade and reduce dollar dependence in bilateral transactions.
