The Chinese government has expressed its support for Nigeria’s request to increase its currency swap line and its intention to issue panda bonds.
This came to light following a meeting between Chinese Foreign Affairs Minister Wang Yi and President Bola Tinubu at the presidential villa.
A currency swap line is an agreement between two central banks to exchange currencies, while panda bonds are securities denominated in Chinese Yuan (renminbi) issued by a foreign entity in China.
China and Nigeria recently renewed their currency swap agreement, valued at 15 billion yuan (approximately $2 billion), for a three-year term. This renewal aims to bolster trade and investment between the two nations by strengthening financial cooperation and promoting the use of both currencies in bilateral transactions.
Minister Yi told journalists that the existing currency swap agreement “shows how well we have carried out our financial cooperation and sustained its momentum.”
He further stated, “As with regard to Nigeria’s wish to increase the line of the currency swap we will favourably study and consider the issue, our cooperation is going well in many ways, in terms of finance.” Yi also welcomed Nigeria’s plan to issue panda bonds in China.
“We welcome the panda bonds to be issued. We welcome Nigeria to issue panda bonds in China, because we have full confidence in Nigeria’s credibility. And by issuing panda bonds, Nigeria will gain good revenue and the safety is guaranteed through financial support.”
He added that China is committed to contributing to Nigeria’s infrastructure development, particularly in railway projects.
He cited the recent financial support from Chinese banks for the phase three of the railway modernization project and the $254.76 million loan granted by the China Development Bank (CDB) on January 8 for the Kano-Kaduna railway project, which is being constructed by China Civil Engineering Construction Corporation (CCECC).
President Tinubu also advocated for an increase in the $2 billion currency swap during the meeting, stating that the current level is “inadequate considering our programme.”
He expressed hope that increasing the swap line would accelerate infrastructure development in Nigeria and deepen strategic bilateral relations. “If you can increase that, it will be well appreciated. Our bond should grow stronger and become unbreakable,” Tinubu said.
Tinubu also called for an upward review of the $50 billion aid package for Africa announced by Chinese President Xi Jinping last year, arguing that the continent’s infrastructural needs are greater.
“The infrastructural needs of Africa are greater than that, and we want to move as rapidly as our other counterparts. All share your vision of rapid development. Africa values the relationship with China, and we seek deeper collaboration for infrastructural development,” he stated.
President Tinubu also sought China’s support for Nigeria’s bid for a permanent United Nations Security Council seat. He thanked President Xi Jinping for his hospitality during his visit to China last year and affirmed that Nigeria is committed to meeting developmental goals and providing counterpart funding for projects.
Minister Yi acknowledged Tinubu’s appointment of a Director General and Global Liaison for the Nigeria-China Strategic Partnership. He reiterated China’s adherence to the one-China principle and pledged continued support for Nigeria’s “Renewed Hope Agenda,” counter-terrorism efforts, and regional security. Yi indicated that Chinese investments in Nigeria would prioritize job creation and infrastructure development.
Yi also stated that China supports including an African country in the UN Security Council, calling the current exclusion a “historical injustice.”
“We stand with Africa, and we will not support a country that invades another country.”
The foreign minister said China would welcome Nigeria’s membership in the BRICS and participation in the global development mechanism.
He said China fully supported Dr Ngozi Okonjo-Iweala, the Director General of the World Trade Organisation (WTO), for a second term in office.
The minister lauded President Tinubu for his visionary leadership and consistency in projecting Africa’s needs, which require China’s support.
“You brought Renewed Hope to the people of Nigeria. Your economy has sustained sound momentum, and Nigeria’s global influence has steadily increased. Nigeria has played an important role in upholding regional peace and has become an important force for African stability.
“We congratulate Nigeria on its achievements and believe that, under your leadership, Nigeria will realise greater achievements,” Yi further stated.