The Nigerian Presidency has hailed recent progress in the foreign exchange (forex) market after reports confirmed that Chinese traders are now accepting naira directly for transactions instead of U.S. dollars.
This comes amid renewed efforts to strengthen the Nigeria–China currency swap deal and the increasing adoption of peer-to-peer (P2P) forex platforms, both of which have helped reduce demand pressure on the U.S. dollar.
Nigeria–China Currency Swap Deal Boosts Naira
Nigeria and China first signed a $2.5 billion currency swap agreement in 2018 to reduce overdependence on the dollar and ease bilateral trade. Under the arrangement, the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC) provided liquidity in naira and yuan, enabling importers and exporters to trade directly without converting through the dollar.
The deal was renewed in December 2024 at $2 billion, strengthening trade ties with China—Nigeria’s largest trading partner. In 2024 alone, Nigeria imported ₦14.14 trillion worth of goods from China while exporting over ₦3 trillion in return.
With the deal in place, importers can now pay in yuan while Chinese exporters accept naira, a development that forex traders say has eased pressure on the U.S. dollar.
Traders Confirm Dollar Demand is Dropping
According to Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON):
“The Chinese are now collecting naira for yuan, doing P2P. Go to any mining factory and you will see a Chinese man in Nigeria. There is a lot of liquidity in the market.”
Gwadebe explained that importers no longer see the need to convert naira to dollars before converting again to yuan. Instead, transactions are done directly, avoiding dollar fluctuations.
He noted that even during periods when the swap deal temporarily lapsed, Nigerian and Chinese businesses continued similar arrangements informally until the official renewal.
Peer-to-Peer (P2P) Forex Platforms Changing the Game
Alongside the China deal, the rise of P2P forex platforms has become a major factor in naira stability.
P2P allows individuals to exchange currencies directly, often at better rates than through banks or bureaux de change. For Nigerians paying tuition abroad, medical bills, or sending remittances, P2P offers flexibility and speed, cutting out middlemen.
Gwadebe described the combination of P2P platforms and the China swap deal as a “game-changer” for the forex market.
Why the U.S. Dollar Still Dominates
Despite the progress, some traders insist the dollar remains king in the global market.
A forex dealer, identified as Yusuf, argued:
“Yes, the swap has some influence, but its effect on the broader market is limited. Many traders still prefer the U.S. dollar because it is more globally accepted. Even Chinese suppliers sometimes insist on dollars.”
He added that yuan is not widely available in the parallel market, making it less practical for everyday use compared to dollars, pounds, or euros.
Presidency Credits Tinubu’s Reforms, Mocks Opposition
Reacting to the development, Bayo Onanuga, Special Adviser to President Bola Tinubu on Information and Strategy, praised the strengthening of the naira in global trade.
On his verified 𝕏 account, he wrote:
“This is a salutary development for the Nigerian economy. The Tinubu reforms are making foreigners have faith in the naira. The almighty U.S. dollar is not the ultimate king here. The naira is waxing stronger as an international means of exchange.”
Onanuga even revealed he had personally made purchases on Chinese platforms using naira cards.
In a political twist, he also took a swipe at opposition leaders Peter Obi, Atiku Abubakar, and Nasir El-Rufai, suggesting they would not celebrate the achievement.
Key Takeaway
The acceptance of the naira in Chinese trade, supported by the currency swap deal and P2P platforms, marks a significant step toward forex stability in Nigeria. While challenges remain—especially the dominance of the U.S. dollar—the development signals growing international confidence in the Nigerian currency under President Tinubu’s economic reforms.
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