The National President of the Association of Bureau De Change Operators (ABCON), Aminu Gwadabe, has revealed that Chinese traders and investors in Nigeria are increasingly conducting transactions in naira rather than the US dollar, signaling growing confidence in the local currency.
Gwadabe attributed this shift to the Nigeria-China bilateral currency swap agreement signed in December 2024, valued at N3.28 trillion (approximately 15 billion yuan).
He said the deal has bolstered trust in the naira and facilitated smoother peer-to-peer (P2P) transactions between Chinese businesses and Nigerian counterparts.
“The Chinese are now accepting naira for yuan through peer-to-peer transactions,” Gwadabe said.
“Visit any mining factory, and you will find Chinese nationals conducting business directly in naira.
This is happening even though the Central Bank of Nigeria (CBN) is not actively facilitating these exchanges.”
He further explained that the development is streamlining trade and reducing reliance on the US dollar.
“If a Nigerian is importing from China, all he needs now is yuan to complete the transaction.
There’s no need for dollars. So why go through a third currency?” he stated.
This trend comes as the naira continues to appreciate against the dollar.
On Tuesday, the naira exchanged at N1,526.06 per dollar, reflecting a notable recovery in the official and parallel markets.
The currency’s rise has been welcomed by businesses and traders, particularly amid ongoing efforts by the Federal Government to stabilize the foreign exchange market.
A presidential spokesperson, Bayo Onanuga, recently declared that the US dollar is no longer the dominant force over the naira, emphasizing the government’s commitment to strengthening Nigeria’s currency and reducing dollar dependency in trade.
Experts say that Chinese traders’ preference for naira is a strategic response to several factors.
First, the currency swap agreement allows for direct conversions between naira and yuan, eliminating the need for US dollars as an intermediary.
Second, the approach reduces transaction costs and mitigates exposure to fluctuations in the dollar exchange rate.
Third, it demonstrates growing trust in Nigeria’s financial and regulatory systems, particularly in sectors like mining, manufacturing, and wholesale trade.
The currency swap agreement between Nigeria and China represents one of the largest bilateral deals in recent history, aimed at promoting trade, investment, and financial cooperation between the two countries.
According to analysts, the swap has the potential to expand Nigeria’s access to Chinese markets and encourage more foreign direct investment denominated in local currency, boosting economic resilience.
ABCON has also noted that smaller businesses and BDC operators are now increasingly facilitating yuan-to-naira transactions, responding to demand from Chinese traders.
This has opened opportunities for local traders and financial intermediaries, who are acting as bridges in these cross-border transactions.
Financial analysts suggest that this trend could have broader implications for Nigeria’s foreign exchange strategy.
With more trade settled in naira or yuan, the pressure on Nigeria’s US dollar reserves may ease, providing room for policy adjustments that could further stabilize the naira.
Meanwhile, sectors such as mining, manufacturing, and wholesale imports are already experiencing smoother cash flows as Chinese investors increasingly adopt local currency for daily operations.
This shift is expected to create a more predictable business environment, reduce transaction risk, and enhance bilateral trade between Nigeria and China.
As Nigeria continues to recover from years of foreign exchange volatility, the adoption of naira in bilateral trade with China represents a strategic milestone in diversifying currency usage, strengthening economic sovereignty, and building investor confidence in the domestic financial system.