Don  Lauds    Nigeria-China Currency Swap Deal

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By Udora Orizu in Abuja

 A university don, Prof. Ellis Idemobi, has applauded the recent currency swap deal between Nigeria and China.

Idemobi of the Department of Business Administration, Chukwuemeka Odumegwu Ojukwu University, Igbariam, Anambra State, who spoke at a business interactive session in Awka, Anambra State, said the deal, worth more than $2.5 billion, would boost Nigeria’s trade with China and reduce pressure on the naira.

The deal, he said, was expected to provide adequate liquidity for importation of Chinese goods into Nigeria by improving the speed, convenience and volume of transactions between the two countries.

According to him, China, being Nigeria’s biggest source of goods, including consumer goods, textiles and machinery, the currency deal would make it possible to buy from China without using the US dollar.

He added that  this would make Chinese imports into Nigeria cheaper.

Idemobi noted that since recent estimates had shown that over 50 per cent of consumer goods imported into Nigeria annually come from China and Asia and less than 10 per cent from the United States of America, analysts had wondered why Nigerians must use the US dollar to transact with China.

He then praised the efforts of federal government and the Central Bank of Nigeria (CBN), noting that a number of African countries, notably South Africa, Ghana and Zimbabwe are already in deals with the Chinese central bank on currency swaps that enable importers to use the Chinese Yuan to avoid foreign exchange losses when trading with China.

The university don urged the Nigerian government to develop policies that would encourage Nigerian businessmen to partner with their Chinese counterparts in the development of local capacity for the production of the goods and services they may have imported into the country for several years to save local firms from going under due to the deal.