One wise thing Nigeria can do at this moment to benefit from its deals with China is to boycott the U.S. Dollar and conduct its business using either the Naira or the Yen.
Nigeria will seriously be on the losing side if it conducts its business with China using the dollar as the mode of payment considering the huge difference in exchange rate.
After doing a critical thought, an economist, Adebomehin Ganiyu, has enjoined the Central Bank of Nigeria (CBN) to boycott the use of the USD in its transactions with China.
According to him, it will be wise to take seriously the currency swap agreement with Peoples Bank of China (PBoC) to reduce reliance on dollars for trade.
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“This is the time to implement the Nigeria-China currency swap so that we don’t put all our eggs in one basket.
“So, Nigerians who are dealing with China should deal with Chinese currency or with the Naira and not with the dollar or euro,
“That will reduce the pressure on dollar or pound.
“This is the time to take it very seriously. The Federal Government signed the agreement. It was done briefly then we didn’t know what happened again.
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“If you look at the global trend, emerging markets by the BRICS are trying to downplay the importance of dollar, euro or pound because these currencies are not theirs and they can’t print them.
“So, if we can now implement the Chinese-naira swap, it will be very helpful for business trade.’’
The expert also linked the rising inflation to the exchange rate, saying that “if any business man spends more Naira to buy dollars and does not know what the cost will be the next time, he will jerk up the price.
“So inflation passed through the exchange rate will be automatic as businessmen continue to use more Naira to buy dollars.’’
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In May 2018, the CBN signed a currency swap deal valued at Renminbi (RMB) 16 billion (about $2.5 billion) with the PBoC.
Godwin Emefiele, the suspended CBN Governor, and Yi Gang, the former PBoC Governor, signed the swap deal.
The deal was designed to provide the Chinese and Nigerian currencies directly to industrialists and other businesses from both countries.
