$6bn loan: Buhari decries Nigeria-China trade imbalance, sign currency swap deal

By Odunewu Segun

Just as Nigeria secured a $6 billion loan facility from China through a currency swap deal to boost trade relations between both countries during a business meeting in Beijing, President Muhammadu Buhari has called on the Nigerian and Chinese business communities to work harder to reduce the trade imbalance between both countries.

Speaking at the opening of a Nigeria-China/investment Forum, President Buhari said the trade imbalance which is currently in favour of China must be mutually beneficial and conducted with reciprocated respect and trust.

“Although the Nigerian and Chinese business communities have recorded tremendous successes in bilateral trade, there is a large trade imbalance in favour of China as Chinese exports represent some 80 per cent of the total bilateral trade volumes. This gap needs to be reduced,” President Buhari told the gathering.

The President also advised the gathering not to see Nigeria as a consumer market alone, but rather as a destination for investments where goods can be manufactured locally. He said his government was committed to supporting investors that were ready to establish manufacturing and processing facilities in the country.

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The President assured the gathering that his administration was doing everything possible to address concerns about security in Nigeria. “We are committed to protecting all lives and property within our borders. You can therefore be rest assured that your investments in Nigeria will be safe and secure,” he said.

Speaking on the currency swap arrangement with China, Lin Songtian, Director Gnenral of the Chinese foreign ministry’s African affairs department, a framework on currency swaps has been agreed with Nigeria, making it easier to settle trade deals in yuan. China has signed similar swap agreements with countries ranging from Kazakhstan to Argentina to promote wider use of its yuan.

Both President Xi Jinping of China and President Muhammadu Buhari at the meeting agreed to work together in agriculture, fishing and the manufacturing of cars, construction materials and textiles.

Business and trade relations between Nigeria and China have grown astronomically in the last decade with bilateral trade volumes rising from USD2.8 billion in 2005 to USD14.9 billion in 2015.

Nigeria accounted for 8.3 per cent of the total trade volume between China and Africa and 42 per cent of the total trade volume between China and the Economic Community of West African States (ECOWAS) countries in 2015.