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Nigeria and China are preparing to sign a landmark deal to exchange digital currencies directly, aiming to reduce reliance on the US dollar for international trade.
The agreement would allow Nigeria’s naira to be converted directly to the Chinese yuan using China’s digital renminbi (RMB), a central bank-issued digital currency.
This move, officials say, will simplify trade, reduce business costs, and help stabilise Nigeria’s economy.
Joseph Tegbe, Director-General of the Nigeria-China Strategic Partnership (NCSP), confirmed that discussions were at an advanced stage.
He described the deal as a step towards a stronger, more mutually beneficial trade relationship between the two countries.
“China has pledged over \$30 billion in investments and has shown serious interest in Nigeria’s economic opportunities,” Tegbe said. “This is not just trade; it is a strategic collaboration that benefits both sides.”
Nigeria and China first signed a currency swap deal in 2018, which was renewed in December 2024. The agreement allowed businesses in both countries to settle transactions directly in naira and yuan instead of using the dollar, easing pressure on Nigeria’s foreign exchange reserves.
CBN Governor Mr. Olayemi Cardoso, represented by Mr. Anthony Ogufere, highlighted that China has become Nigeria’s largest trading partner, accounting for 35% of imports and a trade volume of \$11.58 billion in 2024.
He said that using digital currency could cut shipping costs, speed up port clearance, and support trade finance in key sectors like the maritime industry.
Despite the enthusiasm, experts warn of hurdles. Nigeria’s trade imbalance with China and the limited acceptance of the yuan among local businesses could slow progress.
Analysts suggest the government must work on educating traders, improving policy coordination, and boosting non-oil exports to China to fully realise the deal’s benefits.
The digital renminbi deal is expected to open new opportunities in Nigeria’s digital asset markets. Nicholas Okoye, a global investment expert, said that adopting digital asset markets could transform Nigeria’s finance and investment landscape, creating wealth across all sectors.
Okoye explained that digital currencies and asset tokenisation are key parts of the Fourth Industrial Revolution. He believes that these technologies will help African countries reflect their true wealth potential and reduce dependency on volatile foreign exchange markets.
Governor Babajide Sanwo-Olu of Lagos State, represented by Finance Commissioner Abayomi Oluyomi, said that Lagos plans to monetise idle assets and raise green bonds to fund infrastructure, using digital platforms as part of the state’s growth strategy.
As Nigeria prepares to finalise the digital currency swap deal, experts agree it could be a game-changer for trade and economic cooperation with China, while also reshaping the future of finance in Africa.
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