Nigeria’s Minister of Foreign Affairs, Geoffrey Onyeama has said that it would be wrong to report the currency deal between Nigeria and China as a swap. He said this while briefing journalists of the benefits of President Buhari‘s China visit.
It’s not really a swap. What it takes is that as the Chinese economy goes strong, there is some pressure on them from the trading partners, international financial institutions. They agreed that the money should be internationalised. So, they started that for a while. They were protecting it also. They did not allow it to be fully exchangeable.
But now, their economy is fully strong, they are looking for a way to internationalise the currency. Now, they are saying essentially that they wanted to segment it. For Southern Africa, South Africa is going to be the sort of a hub for the currency. So, they are going to be the focal point for the Chinese to make that available for trade in that area.
In West Africa, they are looking for a hub. Ghana is interested in being the hub for the currency to circulate it for those who want to use it. It is not compulsory. But Nigeria is a bigger country with bigger economy. So that does make sense. And they became kind of attracted to Nigeria to be the hub.