The Nigerian government has been advised to utilize the currency swap agreement with China to strengthen the Naira, its local currency.
Aminu Gwadabe, President of the Association of Forex Bureau Operators of Nigeria, made the call in Lagos, Nigeria’s economic hub, on Tuesday.
The businessman advised the apex bank to deepen the currency swap pact with China and diversify commodity exports to the U.S. in order to diversify foreign exchange earnings for the country.
Nigeria should focus on diversifying its foreign exchange earnings through the promotion of Diaspora remittances for economic buffer and foreign reserves accretion, he added.
In April 2018, China’s central bank inked a currency swap agreement with its counterpart in Nigeria. A total of 15 billion yuan (about 2.17 billion U.S. dollars) for 720 billion Nigerian naira or vice versa, will be swapped in three years.
The deal can be extended by mutual consent, which made Nigeria the third country in Africa, after South Africa and Egypt, to sign such a deal with China.
Nigeria is also the first African country to accept Chinese renminbi (RMB) in its foreign reserve.