House of Reps Moves To Revive Nigeria-China Currency Swap Deal

The House of Representatives has taken decisive steps towards the revival of the Bilateral Currency Swap Agreement (BCSA) between Nigeria and China.

The lower chamber, during its plenary on Wednesday, unanimously agreed to collaborate with the Central Bank of Nigeria (CBN) to expedite the implementation of this significant currency swap deal.

The resolution stemmed from a motion brought forward by Jafaru Leko (APC, Bauchi), drawing attention to the relative dormancy surrounding the Bilateral Currency Swap Agreement after its initiation three months ago. He urged for a more aggressive approach, advocating for the Chinese Yuan (CNY) to be integrated into Nigeria’s foreign reserve as a major currency.

Leko emphasized the necessity of considering the Yuan as a trading alternative due to the Naira’s depreciation against the US dollar and other key currencies. He highlighted China’s pivotal position in global trade and the stability of its currency, citing the potential benefits of adopting the Yuan as an official foreign exchange reserve currency.

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However, Deputy Speaker Ben Kalu suggested that rather than initiating a new policy, the government should focus on revitalizing the existing currency swap scheme. Consequently, an amendment proposed by Sada Soli (APC, Katsina) urged the acceleration of the 2018 currency swap agreement, which gained unanimous support in the House.

To address this, the Committees on Banking Regulations, Banking, and Other Ancillary Institutions have been tasked with engaging the CBN, aiming to expedite the implementation of the currency swap deal. They are expected to report back to the House within four weeks, signaling the House’s proactive commitment to leveraging this agreement for the nation’s economic benefit.